USD longs reduced, GBP shorts declined - Rabobank


Analysts at Rabobank note that USD net long speculative positions fell to the lowest level so far this year of just 2.34k last week, according to IMM Net Speculators’ Positioning as at July 11, 2017.

Key Quotes

“This was even before comments from Fed Chair Janet Yellen were interpreted as relatively dovish by the market and before inflation and retail sales published on Friday surprised on the downside. These data cemented our conviction that the Fed will refrain from raising rates further this year following two hikes in 1H.”

“Market speculators increased their bullish bets on the euro to a year-to-date high last week. The euro remains supported by fading political risk in the Eurozone (Macron’s victory in the French presidential election was a major boost for the single currency), signs of economic recovery in the bloc and rising market speculations that the ECB will start to withdraw its unprecedented monetary policy stimulus. Last week the Wall Street Journal reported that ECB President Draghi will speak at Fed’s policy conference in Jackson Hole next month when he may signal the end of QE program. EUR/USD traded as high as 1.1489 last week before trimming its gains.”

“GBP shorts declined further last week. While recently published UK data have been disappointing, GBP/USD has been driven by rapidly fading market expectations that the Fed will raise rates in the second half of the year with the implied probability of a hike in December falling below 50%. Diminishing concerns that the UK could be heading for a hard Brexit also contributed to gains in GBP/USD, which broke above the 1.30 level last week.”

“Only a few months ago speculators were betting heavily that the CAD will depreciate against the US dollar. However, speculative CAD short positions have been largely unwound as net bearish bets plunged to just 8.6k. It is reasonable to assume that the market is now long CAD after the BoC raised the policy rate by 25bps to 0.75% last week and sent a hawkish signal. USD/CAD ended last week trading at the lowest level since May 2016.”

“With the BoJ indicating that it has no intentions to start normalising its monetary policy, net short JPY positions increased to the year-to-date high - just before USD/JPY made a reversal on the back of dovish comments from Fed Chair Yellen and soft set of US data.”

“An impressive rally in AUD/USD last week to the highest level this year was an encouraging signal for the AUD bulls with long net positions rising further to 36.8k from 32.41k.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD fluctuates near 1.0700 after US data

EUR/USD fluctuates near 1.0700 after US data

EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.

EUR/USD News

USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom

USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom

USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap. 

USD/JPY News

Gold stays in consolidation above $2,300

Gold stays in consolidation above $2,300

Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.

Gold News

Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium

Worldcoin looks set for comeback despite Nvidia’s 22% crash

Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.

Read more

Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium

Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out

While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures