What is the outlook for the US dollar?
Here is their view, courtesy of eFXdata:
MUFG Research discusses the latest IMM report and flags a scope for USD short squeeze.
“The release of the latest IMM report at the end of last week revealed that Leveraged Funds continued to pare back short US dollar positions in the week ending the 16th February although they remain elevated. It was driven by a reduction in long positioning in the Australian dollar, Canadian dollar, euro and Swiss franc,” MUFG notes.
“Perhaps reflecting some caution amongst market participants at least that the move higher in US yields poses the risk of a triggering a short squeeze of US dollar positions,” MUFG adds.
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