USD longs edged back, EUR shorts dropped back – Rabobank

According to the IMM net speculators’ positioning as at April 16, 2019, USD longs has edged back a touch but remained essentially consolidative.  

Key Quotes

“Having dropped lower in the November/December period in response to a more dovish outlook for the Fed, USD longs then consolidated for a lengthy period. Another leg lower occurred in mid-March.”

“Net GBP positions dramatically turned positive for the first time since June last week. Investors may have been encouraged by the fact that the Brexit start date has been delayed until late October. That said, the negative impact of political uncertainty on the economy is not a cause for celebration.”

“Short EUR positions dropped back after the previous week’s surge. Shorts have been trending higher since the start of the year, reflecting the loss of confidence in the outlook for the Eurozone economy and expectation for a more dovish ECB. In early April EUR shorts recorded their highest level since December 2016.”

“Net JPY short positions have been pushing higher recently suggesting an improvement in risk appetite. That said, signals have been mixed this year. On the spot market the yen has recently been climbing suggesting some anxiety ahead of Japan’s extended spring break.”

“CHF net shorts increased last week in line with the trend that has existed since mid-January – not too different from the movement in the JPY. Similar to the JPY, safe haven demand tends to be reflected in the size of CHF positions, though the relative attraction of the USD has skewed this trend over the past year or so.”

“CAD net shorts moved higher last week taking a lead from more dovish expectations regarding the BoC. That said, the stronger price of oil should lend support.”

“AUD net shorts have fallen, counter to the trend of recent months.”