USD positions little less short, EUR longs given up some ground - Rabobank

According to the IMM net speculators’ positioning as at September 12, 2017, speculators’ net USD positions were a little less short last week, notes the analysis team at Rabobank. 

Key Quotes

“The forthcoming September FOMC meeting and expected news regarding US tax reform appear to have been the triggers for short covering, which may have a little further to run. USD net positions have been in negative territory for eight consecutive weeks.”

“Having stretched to their highest level since May 2011 the previous week, EUR longs have given up some ground which is coincident with the waning of USD shorts. The next few weeks could be testing for French President Macron given union strike action.”

“After the abnormality of the previous week’s direction, net JPY shorts have re-embarked on their declining trend. Net shorts have now dropped to their lowest level since June suggesting that investors are still motivated by the safe haven plight triggered by N. Korean related tension. BoJ policy meeting this week set to reiterate a dovish stance.”

“GBP shorts dropped back from their recent levels ahead of last week’s BoE policy meeting. The hawkish sentiments expressed by the MPC indicate that shorts are set to fall again in the next set of data. That said, political risk still complicates the outlook for GBP.”

“CHF positions remained in negative territory for a sixth consecutive week. The improvement in the Eurozone economy and rotation into the EUR should over time reduce safe haven demand for the CHF. However, this outlook is now complicated by tension between the US and N. Korea which could be supportive for the CHF.”

“CAD longs dropped moderately though positions remained broadly consolidative. Speculation regarding the next BoC policy decision has been supportive. AUD longs softened a little further having reached their strongest level since April 2013 last month. Chinese economic data and prices of iron ore and coal remain in focus.”