USD positioning to continue to react to incoming trade deal details – ANZ

According to CFTC positioning data for the week ending 10 December 2019, leveraged funds and asset managers changed stances on the dollar as the former turned USD buyers while the latter turned sellers, notes the research team at ANZ.

Key Quotes

“Post the CFTC cut-off date, the Fed’s prolonged hold and news on the US-China Phase One trade deal have boosted risk appetite and weakened the USD. We expect USD positioning to continue to react to incoming details on the deal over the coming days.”

“Funds turned sellers while asset managers turned buyers of EUR and GBP. Both currencies have since firmed further on ECB’s expected hold at Lagarde’s first meeting and Boris Johnson’s Conservative Party delivering a decisive victory in the UK elections.”

“JPY and CHF saw broad-based buying, but safe haven positioning will likely see some paring back on positive news on the trade front.”

“On commodity currencies, funds sold CAD and NZD while asset managers bought both. Both were, however, net AUD buyers. Funds’ net AUD positioning turned positive for the first time since May 2018.”

“EMFX net positioning changed only for funds, as they sold MXN by a larger amount than their buying in BRL.”


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