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According to IMM net speculators’ positioning as at May 15, 2018, for the first time since mid-March, USD net positions popped back into positive territory, albeit very modestly, points out the research team at Rabobank.  

Key Quotes

“The better tone has already been clearly obvious in the spot market where the USD has been strengthening on the back of improved interest rate differentials.”

Having remained steady in the previous set of data, EUR longs dropped further last week.  Measured from the high in mid-April, EUR longs have now fallen substantially, though they still remain at a relatively healthy level. Concerns about Italy’s fiscal outlook under the new government could keep confidence in the EUR under pressure.”

GBP net longs continued to drift lower last week, as uncertainty regarding the Brexit timetable wormed its way through market confidence.  The recent drop in net longs also reflects the fall in expectations regarding BoE rate hikes this year.”

CHF net shorts dropped again last week having already fallen sharply to levels last seen in 2012.  This is likely related to the calming of tension on the Korean peninsula and hopes for a compromise on US/China trade.”

CAD shorts held steady having dropped the previous week.  Focus has been on BoC policy although oil prices, Nafta and trade wars also remain in view.  AUD shorts increased again. The previous week net shorts had grown sharply  as the RBA policy meeting signalled no imminent change in policy.”