According to IMM net speculators’ positioning as at June 12, 2018, speculators’ USD positions edged higher to 4,663 in the week ending June 12 staying in positive territory for the fifth consecutive week ahead of crucial meetings held by the Fed and the ECB last week, notes the research team at Rabobank.
Key Quotes
“While EUR longs have been trimmed only modestly from 89,236 to 88,225, the EUR bulls suffered a major blow last week when EUR/USD registered one of its largest daily falls of recent years plunging from around 1.1850 to 1.1564 after the ECB sent a dovish message on Thursday. Apart from widening interest rate differential, the euro is also looking vulnerable to rising political uncertainty in Germany.”
“At this stage the US dollar does look more attractive than the euro.”
“GBP long positions have increased to the highest level since early May amid growing optimism that a hard Brexit will be avoided.”
“The bias has shifted in favour of USD/JPY longs following constructive comments from US President Trump and North Korean leader Kim Jong Un. Persistently low inflation in Japan – the BoJ lowered its expectations for consumer prices last week – also implies that the interest rate differential should support the USD versus the JPY.”
“CAD shorts continued to consolidate after the sharp fall at the end of May. While the CAD is still being driven by news regarding NAFTA, the outcome of OPEC meeting will set the tone for commodity currencies. Saudi Arabia and Russia reportedly intend to raise oil output “gradually.”
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