USD positioning relatively close to neutral, EUR longs remain firm - Rabobank

According to IMM net speculators’ positioning as at March 27, 2018, the brief period of speculators being net long USD was not to last and we are back in net short territory for the second consecutive week, notes the research team at Rabobank.

Key Quotes

“USD has been range-bound for the past few months which has left positioning relatively close to neutral.

“EUR longs remain firmly in net long territory when it comes to speculative positioning. Net longs did increase slightly from the previous week but we are yet to see a print north of 150,000 contracts. The all-time high remains the 148,742 seen at the end of January.”

“Net GBP net long positioning continues to rise with longs rising faster than shorts. Positive developments with respect to Brexit negotiations are key for supporting GBP but despite recent progress, the path ahead is far from clear.”

“Net JPY shorts continue to fall, this being their sixth consecutive weekly drop. Although close to neutral, positioning remains net short and hasn’t been net long since November 2016.”

“CHF net shorts increased again, driven by a paring back of long positions. Net positions have been in negative territory for thirty-four consecutive weeks. Falls in risk appetite tend to be CHF supportive but fear of SNB intervention could prevent strong surges in demand for the CHF going forward.”

“CAD positioning switched from net long to net short in the largest decline in speculative positioning since records began in 1993. Longs were pared back significantly, falling 45,226 contracts while shorts increased 6,384 resulting in a net decline of 51,610 as positioning moved from being long 24,560 contracts to being short 27.050. This move comes as the market prices out further rate hikes from the BoC. We no longer expect any more hikes in Canada this year.”

“MXN net positioning moved deeper into net long territory. MXN remains well supported by carry players and some signs of progress with respect to NAFTA has also helped sentiment.”

“AUD net positioning remains long but shorts increased and longs were pared back. AUD has been under pressure as fears of a US-China trade war increase.”