EUR shorts reduced, broadbased USD demand - ANZ
According to the CFTC positioning data for the week ending 17 October 2017, leveraged funds were net buyers of USD for the third consecutive week, notes Khoon Goh, Head of Asia Research at ANZ.
Key Quotes
“Dollar demand was broadbased, with only the NZD not seeing net selling, though this was before the announcement that there would be a change in government. Overall net short USD positions were reduced by USD3.7bn to USD4.7bn.”
“EUR saw the most selling, with leveraged funds reducing their net EUR long positions by USD1.3bn to USD1.4bn. Despite this, overall net long EUR positions are still elevated, as we head into the ECB meeting on 26 October. Details of the ECB’s asset purchase plan for 2018 will be keenly watched to see if the amount of monthly bond purchases will be reduced.”
“Overall net short JPY positions increased to near recent highs, ahead of the Japanese general election. Net short yen positions rose by USD0.7bn to USD9.6bn, the fourth consecutive week of net selling. Net GBP long positions were halved to USD1.6bn. Net CHF longs were also reduced for the third consecutive week, by USD0.2bn to USD0.9bn.”
“Among the commodity currencies, AUD saw the largest selling. Funds reduced their overall net long AUD position by USD0.9bn to USD5.2bn. CAD saw a very modest decline in its overall net long position by USD0.1bn to USD5.0bn.”
“As mentioned earlier, NZD bucked the trend with net buying of USD0.1bn, which increased leveraged funds’ overall net long exposure to USD0.3bn. The announcement that there would be a change in government late last week after the CFTC cut-off date saw the NZD fall, suggesting an unwinding of long positions by leveraged funds. It is possible that funds could turn overall net short against the NZD, which was last seen in late May.”
“EM currencies saw net selling of USD0.6bn, all in MXN. Net selling of gold contracts resumed after a pause the previous week. Net long positions in 10-year USTs fell for the fourth consecutive week.”