JPY shorts dropped, USD positions held in negative territory - Rabobank

According to the IMM net speculators’ positioning as at August 15, 2017, for the fourth consecutive week, net JPY shorts dropped fairly substantially. 

Key Quotes

“Although tensions between the US and N. Korea eased during the course of last week, safe haven flow will likely remain the dominant factor for JPY positioning near-term.”

 “Net USD positions held in negative territory for a fourth consecutive period, although shorts declined from the previous week’s level which was the highest since April 2014. Weak US inflation data and the pull of low bond yields have been weighing on the USD. Any re-ignition of tensions between the US and N. Korea is also likely to be modestly USD negative.”

“GBP shorts dropped again last week to their lowest level since June on concerns regarding a slowdown in UK economic activity. Against a backdrop of strengthening world growth, UK economic data have been generally sluggish.”

“EUR longs dropped last week to their lowest level since early July. Better Eurozone economic data and Macron’s success in the French parliamentary election have triggered a rotation back into the EUR this year. That said, focus is currently firmly on the ECB and any hint that it is preparing to taper its QE programme next year.”

“CHF positions held in negative territory for a second consecutive week, though they dropped modestly. The improvement in the Eurozone economy should over time reduce safe haven demand for the CHF. However, this outlook is now complicated by tension between the US and N. Korea which could be supportive for the CHF.”

“CAD longs eased back but remain elevated as the market debates whether the BoC could be prepared to hike rates again soon. AUD longs consolidated for a second week. In early August longs moved to their strongest level since April 2013 supported by this year’s recovery in iron ore and coal prices.”