Monday, October 26, 2015

CFTC: Net long USD lowest since July 2014 - ANZ

FXStreet (Bali) - Khoon Goh, Senior FX Strategist at ANZ, breaks down the positioning data for the week ending 20 October 2015, noting that net long USD positions were reduced to their lowest level since July 2014.

Key Quotes

"Net long USD positions were reduced to their lowest level since July 2014 by leveraged funds. They net sold USD4.6bn to take their overall net long positioning to USD11.0bn (see Figure 3 in PDF). There was also a reduction in non-commercial ICE DXY positions by USD1.0bn to USD2.7bn."

"The dollar selling was once again broad-based. Unlike the previous week though, where GBP saw net selling, this time leveraged funds increased their net long GBP positions by USD1.4bn to USD2.5bn."

"This time it was the AUD’s turn to buck the trend, with net selling of USD0.1bn, taking leveraged funds’ overall net short position in AUD to USD1.8bn (see Figure 10 in PDF). We suspect the AUD selling was on the back of one of the major Australian banks (Westpac) announcing an increase in its mortgage rates, which prompted the market to price in a higher chance of an RBA rate cut."

"Net short EUR positions were reduced by USD1.5bn to USD6.1bn ahead of the ECB meeting on 22 October (see Figure 5 in PDF). This unwinding of short positions explains the large sell-off in EUR when ECB President Draghi flagged that he is looking at providing more easing as early as the December meeting."

"NZD saw net buying for the third consecutive week, reducing leveraged funds’ overall net short NZD position by USD0.2bn to USD0.3bn (see Figure 11 in PDF). The unwind of NZD short positions reflects reduced odds that the market is placing on a rate cut by the RBNZ at their 29 October meeting."

"Net long positions in EM currencies rose by USD0.1bn to USD0.2bn, the highest since April this year (see Figure 14 in PDF). Leveraged funds have now turned net long in RUB for the first time since July. While they still maintain an overall net short position in BRL, the size of their short bets has been halved since its late September peak."
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