Aggregate USD position deteriorates, CAD now held net long - Scotiabank

Analysts at Scotiabank note that bearish USD positioning continues to build on the back of an improvement in sentiment toward all of the reporting currencies with the exception of JPY (this week joined by CHF), as per the CFTC data which cover up to Tuesday July 18 & were released on Friday July 21.

Key Quotes

“Fresh positions are being added (rather than existing ones being covered) with bulls driving notable w/w swings in CAD, AUD and EUR as bears drive the bulk of the $1.9bn w/w deterioration in JPY. The aggregate USD short has widened $2.8bn to $7.8bn, its most bearish since February 2013. EUR, AUD, MXN, NZD and CAD are now held net long, with modest shorts in CHF and GBP. JPY is the only notable short.”

“CAD positioning has drifted into bullish territory for the first time since mid-March with a positive $1.3bn w/w swing pushing the net (now long) to $0.6bn. Gross longs drove the bulk of the w/w improvement in both CAD and AUD, the latter also seeing a $1.3bn w/w build to a $4.1bn net long.”

“EUR bulls are in control driving a $1.2bn w/w build in the net long to $13.2bn—a fresh multi-year high. In terms of details, gross longs are at a fresh record (200K contracts) and gross shorts are at the narrower end of their multi-year range.” 

“JPY is the largest—and only notable—short. Bearish positioning widened $1.9bn w/w to $14.1bn on the back of a sizeable build in gross shorts ($1.6bn) and modest covering of longs ($0.3bn). In terms of details, gross shorts have climbed to 164K contracts at their highest level since 2007.”