• The latest IMM data covers the week from 28 July to 4 August.
  • The data shows that speculative investors increased their bets that the dollar would depreciate as net short US dollar positions were increased by USD1.2bn. Short US dollar positions were mainly built against the euro, which had appreciated against the dollar to levels above 1.44 during the week covered by the data. This indicates that significant short US dollar positions were in place ahead of Friday’s US employment report, which could explain the sharp move lower in EUR/USD, as the good news lent support to the dollar for a change.
  • The yen stands out as the only currency in which speculative investors reduced their positions against the dollar. Long positions in yen were pared by USD1.8bn, although the Japanese currency has been sold off further following the collection of the data.
  • Speculative investors continued to add to their long positions in commodity currencies, most notably in the Canadian dollar. The currencies of the dollar-bloc have posted an impressive rally on the back of the recent pick up in risk appetite, although the build up in long positions suggests that such trades are increasingly crowded (most notably in NZD).
  • Short positions in GBP were reduced, indicating that speculative investors were roughly neutrally positioned ahead of last week’s surprising announcement by the BoE to extend its asset purchases.