Net short USD positions reduced, long EUR positions cut - ANZ

According to the positioning data for the week ending 15 August 2017, leveraged funds were net buyers of USD for the first time since mid-May, noes he analysis team at ANZ.

Key Quotes

“Overall net short USD positions were reduced by USD1.5bn to USD5.8bn. Given that the dollar had been sold for the previous 12 weeks straight and the level of short positions reached their highest in three years, some selling respite is not unexpected. With the minutes from the July FOMC meeting showing officials starting to question their inflation outlook, it is too soon to expect a major turnaround in short dollar positioning.”

“EUR saw the largest net selling in the week. Funds reduced their net long EUR position by USD2.1bn to USD1.5bn. This could be due to profit taking after EUR/USD failed to push further beyond the 1.19 level. With the ECB minutes showing officials expressing concern over EUR strength, further scaling back of long EUR positions is possible.”

“NZD recorded the second biggest net selling as leveraged funds pared back their overall net long exposure to the kiwi by USD0.5bn to USD1.8bn, the lowest in eight weeks. This comes after the RBNZ said that they had become more uncomfortable with the level of the NZD.”

“GBP also saw net selling, as funds added USD0.4bn to take their net GBP shorts to USD1.2bn, reversing net buying from the previous week. Funds also reduced their net CHF longs marginally in the week. Meanwhile, net JPY shorts were cut for the fourth consecutive week by USD0.9bn to USD7.3bn. Heightened geopolitical tensions have seen yen positioning go up on safe-haven demand.”

“Funds’ bullishness on AUD and CAD continues. Net long AUD positions rose for the tenth consecutive week, up by USD0.4bn to USD6.1bn. Net long CAD positions rose by USD0.1bn to USD3.8bn.”

“EM currencies saw combined net selling of USD0.3bn during the week, with MXN seeing the bulk of the selling.”

“Funds’ positioning in crude oil were trimmed for the second consecutive week. However, net longs in gold rose for the sixth straight week on increased geopolitical risks. Meanwhile, net longs in 10yr USTs longs were cut following net buying in the previous week.”