Broad-based dollar selling across major currencies - ANZ

Research Team at ANZ, lists down the CFTC positioning data for the week ending 13 September 2016.

Key Quotes 

“Leveraged funds turned net sellers of USD for the week as Fed speak did not lend support to a September rate hike. Funds pared their overall net long USD positions by USD1.7bn to USD7.8bn. Dollar selling was broad-based across major currencies. However, price action post the cut-off date suggests some rebuilding of long USD positions on concerns over the outlook for global central banks’ accommodative monetary policies and firmer than expected US August CPI inflation.

Unlike last week, funds increased their net JPY longs by USD0.5bn to USD6.5bn as the yen remained sensitive to uncertainties over the BoJ’s stimulus policies ahead of its meeting this week. Net short EUR positions also fell by USD1.1bn to USD12.4bn after the ECB kept its bond buying program unchanged at its 8 September meeting.

Meanwhile, funds were net buyers of GBP for the third straight week,reducing their overall net short GBP positions by USD0.7bn to USD5bn.

However, commodity currencies were on the back foot against the greenback, led by the AUD − which saw its net long positions fall by USD0.7bn to USD2bn despite the RBA leaving rates unchanged on 6 September. Funds also reduced their net long NZD exposure by USD0.1bn to USD2.1bn, although CAD saw marginal buying of USD0.1bn to net longs of USD0.3bn.

EM currencies were a mixed bag. MXN saw net selling of USD0.2bn for a third consecutive week to take overall net shorts to USD1.4bn, the biggest shorts in a year. While the BRL saw marginal net buying of USD0.01bn, net long RUB positions fell by USD0.01bn as the Bank of Russia cut the key rate by 50bps.

Funds continued to increase their short 3-month Eurodollar contracts while reducing their long 10Y UST contracts on concerns over global central banks’ policy accommodation with the BoJ signalling a preference for a steeper curve.”