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According to IMM Net Speculators’ Positioning as at August 7, 2018, USD speculators’ positions grew for the fourteenth consecutive week, notes the research team at Rabobank.  

Key Quotes

“Broad-based support for the USD reflects 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. That said, contagion from Turkey has seen renewed buying of the traditional safe haven currencies.”

EUR longs have been retreating for a while on the guidance from the ECB  that rates may not be raised until at least summer 2019. Last week’s positions dropped substantially to their lows since May 2017 and more pressure is likely to follow given contagion from Turkey’s troubles.”

GBP shorts continued to grow as fears over the chances of a hard Brexit tightened their grip.  Brexit talks commence again this week and are set to be a dominate focus for the pound.”

Net JPY short positions retreated again last week.  Although fears of trade wars has not triggered much safe haven demand for the JPY in recent month, contagion stemming from Turkish events has now lent some support in the spot market.”

CHF net shorts rose modestly last week, but remained essentially consolidative.  The SNB remains committed to ultra-accommodative policy and this has been diverting safe haven flow related to this year’s sell off in EM currencies into the USD. However, contagion from Tukey’s issue has now lent the CHF support in the spot market.”

CAD shorts continued to drop. The rift with Saudi has weighed but commodity prices and NAFTA talks remain in view.”

AUD shorts have increased to their largest levels since October 2015. US/China trade tensions have weighed on confidence. The RBA remains cautious on its policy outlook and Turkey tensions have increased anxiety levels.”

NZD shorts increased last week  and are likely to push further into negative territory given the RBNZ’s dovish tone.”