Monday, November 23, 2015

Leveraged funds keep increasing net long USD - ANZ

FXStreet (Bali) - Khoon Goh, FX Strategist at ANZ Research Team, reviews the positioning data for the week ending 17 November 2015, noting that leveraged funds increased their net long USD positions for the fourth consecutive week ahead of the release of the FOMC Minutes last week.

Key Quotes

"Overall USD net long positioning stands at USD31.2bn, an increase of USD2.8bn from the previous week, and the highest since mid-April this year (see Figure 3 in PDF). With the interest rate markets pricing in close to a 70% chance of a Fed rate hike in December, leveraged funds look to be similarly positioned for Fed lift-off in the FX market."

"The net buying of USD was broad-based. JPY saw the largest net selling at USD0.9bn, no doubt partly on the back of data showing that the Japanese economy is in technical recession. Overall net short positions in JPY stands at USD8.6bn"

"Both EUR and CHF saw net selling of USD0.8bn each. Policy divergence between the Fed and ECB is likely behind the rise in net short positions in EUR to their highest level since April (see Figure 5). Net short positions in CHF are at their highest since January, just before the SNB abandoned the peg"

"Leveraged funds increased their short exposure to commodity currencies by USD0.4bn to USD3.3bn, as commodity prices remain under pressure"

"EM currencies also saw net selling overall (see Figure 14 in PDF), though BRL managed a marginal reduction in its net short positions. Leveraged funds have turned bearish on RUB again. After four weeks maintaining a net long position in RUB, leveraged funds have gone net short."

"GBP bucked the overall trend, with leveraged funds increasing their net long positions by USD0.1bn to USD0.9bn"
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