These are the main highlights of the CFTC Positioning Report for the week ended on September 28th:
- Speculators added gross longs in the dollar for the third consecutive week to levels past the 45K contracts, the highest since early October 2019. The net longs therefore rose to nearly 2-year tops. The updated “dots-plot” unveiling a probable rate hike as soon as in 2022 coupled with the unexpected hawkish tilt from Powell’s presser pushed the buck higher and sparked a more serious rebound in the US Dollar Index (DXY). Subsequent Fedspeak, upbeat results in the docket and higher yields cemented as well the move higher in the dollar.
- Net longs in the euro subsided to the lowest level so far this year (just 874 contracts) and likely opened the door to the negative territory in the weeks to come. The strength in the dollar post-FOMC, Evergrande spillover concerns and bouts of risk aversion were far too much for the single currency. While. EUR/USD kept the consolidation alive at the beginning of the period, it ended up succumbing to the increasing selling pressure.
- In the safe haven galaxy, net shorts in JPY climbed to levels seen in late August, while net shorts in CHF increased to the highest since early December 2019.
- GBP net longs edged higher to multi-week highs as investors positioned on the positive side ahead of the BoE event, where the central bank matched consensus and delivered a hawkish message. However, Cable and the rest of the risk complex suffered the solid Fed-led push for the dollar, while uncertainties around the UK recovery still weighed on the quid.
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