CFTC Positioning Report: Speculators turned positive on JPY

These are the main highlights of the CFTC Positioning Report for the week ended on August 13.

• Japanese yen positioning shifted to net long for the first time since Q2 2021, as speculators continued to digest the latest BoJ hawkish message and global markets saw calmer waters as US recession concerns kept dwindling. Meanwhile, USD/JPY entered a consolidative phase around the 147.00 region.
• Non-commercial net longs in the European currency dropped to two-week lows amidst an uptick in open interest. Absent news from the ECB, the focus of attention remained on the US economy. That said, disinflationary pressures remained well in place, allowing investors to further price in the start of the easing cycle by the Fed in September, albeit by a smaller size. EUR/USD maintained business above the 1.0900 barrier, although with a bullish bias.
• Net longs in the US Dollar climbed to four-week highs, amidst shrinking concerns of a potential US slowdown and steady speculation of a rate reduction by the Fed as soon as next month. The US Dollar Index (DXY) managed to climb to tops near 103.50, although that move fizzled out afterwards, sending the index back to the sub-103.00 region.
• Net longs in the British pound shrank for the third consecutive week, following the all-time high recorded in the week to July 23 (142,183K contracts). In fact, investors continued to unwind longs in the wake of the dovish cut by the BoE on August 1, although they remained vigilant on further results around the UK economy, particularly employment and inflation. GBP/USD bottomed out near 1.2665, managing to regain strong traction afterwards, mostly on USD weakness.
• In the commodity complex, net longs in Gold climbed to three-week tops against the backdrop of escalating geopolitical risks in the Middle East and the Russia-Ukraine conflict, while prospects of interest rate cuts by the Fed continued to underpin the yellow metal’s uptick.