USD long positions reduced, GBP shorts cut - ANZ

According to the CFTC positioning data for the week ending 20 June 2017, leveraged funds were net sellers of the USD for the fifth straight week despite the US Federal Reserve delivering a rate hike at its June meeting, notes the analysis team at ANZ.

Key Quotes

“Overall net long USD positions were reduced by USD2.5bn to USD6.7bn, the lowest since September 2016. Positioning on the ICE US Dollar Index, which is based off the DXY, fell by USD2.2bn to USD5.5bn, a 3-year low.”

“Dollar selling was mostly broad-based except against the EUR. The shift to being outright net long EUR the previous week did not last. Leveraged funds were heavy sellers of the single currency to the tune of USD3.3bn, resulting in an overall net short EUR position of USD2.4bn. The change in positioning could be due to profit taking, following eight consecutive weeks of net EUR buying and as EUR/USD failed to break above the 1.13 level.”

“GBP saw net buying after three straight weeks of selling. Leveraged funds reduced their net short GBP position by USD0.5bn to USD0.8bn. The surprise 5-3 decision to leave rates unchanged by the BoE at their 15 June meeting, raising the possibility that the BoE could be the next major central bank to follow the Fed in hiking rates, likely spurred the GBP buying. Funds also reduced their net short JPY positions for the second week running, this time by USD1.1bn to USD1.3bn.” 

“CHF positioning turned net long for the first time since December 2016.”

“Despite continued weakness in oil prices, commodity currencies experienced net buying for the fourth consecutive week. Leveraged funds have turned net long AUD again following net buying of USD1.5bn, while overall net long NZD positions rose to their highest level since February this year ahead of the 22 June RBNZ meeting.”

“Among EM currencies, MXN saw net selling of USD1.3bn to reduced leveraged funds’ overall net long position to USD1.0bn. RUB’s net long positions were marginally reduced while BRL positioning was largely unchanged.”

“Net long 10-year UST positions rose to their highest since December 2007. Meanwhile, net long positions in crude oil and gold were reduced in line with falling commodity prices during the week.”