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According to IMM net speculators’ positioning as at  June 19, 2018, speculators’ USD positions surged to their highest level since June 2017 last week  reflecting capital outflows from emerging market and an indication from the FOMC that rates could be increased by a total of 4 times this year, points out the research team at Rabobank.

Key Quotes

EUR longs remained on their declining trend, shrinking to their lowest levels since May 2017 on the back of a dovish message from the ECB  that rates may not be raised until at least summer 2019. Meanwhile tensions within the German government have increased ahead of this week’s EU summit.”

GBP net positions plunged into negative territory ahead of last week’s BoE meeting.”

“Net JPY short positions increased significantly last week on the heels of the US/N. Korean summit.”

“CHF net shorts fell for the third consecutive week.  Reports of an unwinding of large Russian positions may have created additional pressure on the CHF this spring.”

CAD shorts consolidated at the lowest levels since March. In the spot market the CAD has performed poorly in response to the worsening stand-off between the US and Canada over trade.”

AUD shorts plunged. Weaker than expected labour data and increasing US/China trade tensions have been contributing factors.”