USD longs increased, EUR and JPY sold - ANZ

Khoon Goh, Head of Asia Research at ANZ, lists down the CFTC positioning data for the week ending 7 March 2017.

Key Quotes

“Leveraged funds were net buyers of USD as expectations of a March Fed rate hike firmed to a near certainty. Overall net long USD positions increased by USD6.1bn to USD15.1bn. The USD was bought against all major currencies bar the CHF and AUD.”

“EUR saw the most selling with leveraged funds increasing their net short positions by USD2.3bn to USD13.3bn. Upcoming national elections in Europe will increasingly become a focus for the EUR. Post the CFTC cut-off, reports that the ECB could increase interest rates before the end of QE sent the currency higher. This will likely be reflected in the next CFTC report.”

“JPY was sold by leveraged funds for the first time in nine weeks. Rising yield differentials in favour of the USD were likely behind this change in JPY positioning, which saw overall net short positions increase by USD1.2bn to USD3.3bn. GBP saw net selling of USD1bn, halting a three-week run of net buying. Net short GBP positions were increased to USD4.4bn.”

“After a seven week run which saw leveraged funds buying USD10bn worth of commodity currencies, net selling returned. NZD saw the largest selling at USD0.9bn, reducing leveraged funds’ overall net long positions to USD1.5bn. NZD positioning had previously been at record highs. Net long CAD positions were reduced by USD0.8bn to USD1.3bn. AUD bucked the trend, managing a small increase in its overall net long positions to USD4.1bn. We suspect AUD positioning was supported by AUD/NZD buying, as the cross broke through key resistance levels during the week.”

“Positioning in EM currencies was trimmed slightly. Net short MXN positions were little changed despite the rally in the currency during the week. Net long BRL positions were reduced to USD0.51bn from USD0.54bn previously, while RUB net long positions were maintained at USD0.64bn.”

“Net long positions in crude oil continued to fall from the record levels reached on 21 February. Further declines in positioning are likely as WTI oil price falls below USD50/bbl. Net long positions in gold also fell on weakening gold prices.”