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According to IMM net speculators’ positioning as at September 11, 2018, USD speculators’ long positions have been consolidative for the past four weeks after a solid increase since May/June, notes the research team at Rabobank.  

Key Quotes

“Broad-based support for the USD has reflected heightened capital outflows from emerging markets and an indication from the FOMC that rates could be increased by a total of 4 times this year.”

EUR positions continued their climb back into positive ground.  This week optimism that Italian assets could be oversold in the approach to the budget announcement could be supportive.”

GBP shorts have dropped back from their late August levels on flickers of optimism about the likelihood of an EU/UK Brexit deal, although they remain elevated.  PM May continues to be undermined by members of her own party reflecting her weak position.”

Net JPY short positions have increased over the past two weeks, though they remain about half the size of their levels early in the year.  Although fears of trade wars did not trigger much safe haven demand for the JPY during the summer, pressure on EM markets has seen shorts drop from their July highs.”

CHF net shorts have dropped back for three consecutive weeks, though the CHF has been slow to react to the pressures on EM.  The SNB remains committed to ultra-accommodative policy and this has been diverting safe haven flow this year into the USD.”

CAD shorts have increased slightly over the past two weeks.  NAFTA talks remain in view.”

“Having dropped in late August,  AUD shorts have been consolidating over the past three weeks. US/China trade tensions have weighed on confidence in recent months and the RBA remains cautious on its policy outlook.”

 

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