A reversal of yesterday’s losses in KC which closed the day at 122.50 +1.55, largely courtesy of currency related support, as the market lacks momentum and remains in a sideways pattern. The dollar index traded to a 3 year low after U.S. Treasury Secretary Mnuchin, speaking to reporters at the World Economic Forum in Davos, endorsed a weaker greenback stating that “obviously a weaker dollar is good for us as it relates to trade and opportunities”. A well-seasoned coffee trader pointed out that in euro terms KC traded to the lowest level since the 10th of February 2014 as the $/EUR traded to its highest level (1.2402) since the 17th of December, 2015. The intraday rhythm of trading closely mirrored the BRL which strengthened to 3.1750 $/R by the close of New York and further steadied to 3.1625 (+2.4%), after the second of three judges in Lula’s appeal trial voted to uphold a graft sentence, thus ruling out the possibility of an acquittal. Open interest climbed by another 2,483 lots and over the COT reporting week has increased by 8.757 lots, despite a net change of only +.50 in a 3.95 point range. The BMF will be closed tomorrow.
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