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According to the IMM net speculators’ positioning as at  May 22, 2018, after having dipped their toes into positive territory the previous week, speculators’ USD long positions have climbed further, notes the research team at Rabobank.

Key Quotes

“In reflection of the move in the spot market, further gains in USD longs look likely in the next set of data.”

EUR longs fell back for a fifth consecutive week though they remain elevated from a historical perspective.  The surge of concern about the Italian political situation suggests further downside pressure on EUR longs in the next set of data.”

GBP net longs remained stable last week, having dropped back significantly since mid-April.  The drop in net longs mostly reflects the fall in expectations regarding BoE rate hikes this year. UK political uncertainty is also a risk factor for the pound.”

Net JPY positions returned to negative territory having briefly pushed into positive ground the previous week.  Panic selling in Italian bonds and a raft of fears about the fiscal coherence of EMU has sparked fresh safe haven demand for the JPY, suggesting net longs could be back in favour in the next set of data.”

CHF net shorts increased for a third consecutive week.  Reports of an unwinding of large Russian positions may have created additional pressure on the CHF this spring. That said, political tensions in Italy could lend the safe haven CHF support in the next set of data.”

CAD shorts dropped back further last week.  Focus has been on BoC policy although oil prices, Nafta and trade wars also remain in view.  AUD shorts moderately slightly having increased sharply earlier in the month  as the RBA policy meeting signalled no imminent change in policy.”