Early morning weakness seemed likely to extend for the day, as a poor performance was spread across commodities as the dollar traded higher amidst renewed European concern. With the Bank of England announcing a cut in the benchmark rate to 25bps paired with monetary stimulus following a dramatic reduction in official growth expectations, risk appeared to be off. And shortly into the Americas’ session, this indeed seemed to be the case as heavy selling arrived along with the summer-slumbering traders. However, while the selling seemed largely speculative, notable roaster buying materialized into the weakness. Additional support just below the lower Bollinger Band at 138.25 mid-session steadied things as the BRL provided further impetus higher as it traded to its strongest level since June 30th. While bullish traders seemed content to settle for a moderately lower close, a surprise move higher emerged with 45 minutes left in the day. Excellent volume followed during the pre-close period as the high for the session was traded (143.25), leaving many bewildered though a similar rally was visible in sugar. Spread volume was impressive, coming in at 21,034 and while the weakening structure has given some pause, it appears to be at best a secondary consideration for the moment.
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