USD longs reduced, JPY net longs increased - ANZ

Research Team at ANZ, lists down the currencies positioning data for the week ending 30 August 2016.

Key Quotes

“Leveraged funds reduced their net long USD positions for the fourth consecutive week. This is despite a rise in the DXY following US Federal Reserve Chair Yellen’s Jackson Hole speech arguing that the case for a rate rise has strengthened. Funds reduced their overall net long USD positions by USD3.1bn to USD7.7bn, the lowest in eight weeks. USD selling was broad-based against all major currencies.

Despite JPY weakness during the week, leveraged funds increased their net long JPY positions by USD0.9bn to USD7.0bn, the highest since December 2011. The BoJ’s signal towards more aggressive stimulus, in conjunction with a possible Fed hike later this year, could see these positions unwind.

Funds were net buyers of GBP for the first time since the Brexit vote in June. The amount was small at USD0.1bn, and leveraged funds still maintain a large overall net short position against GBP worth USD5.8bn. Net short EUR positions were reduced by USD0.4bn to USD12.9bn.

After weeks of mixed fortunes, commodity currencies saw net buying totalling USD0.7bn. This was led by CAD, whose overall positions flipped back to net long from net short the previous week. Funds also remained upbeat about the AUD and NZD, which saw their net long positions rise by USD0.1bn each to USD2.3bn and USD2.0bn respectively.

EM currencies remained on the back foot against the greenback. MXN and BRL saw combined net selling of USD0.14bn, although net long RUB positions rose by USD0.07bn.

Despite increased odds of a Fed rate hike this year, funds increased their net long UST contracts to 120.9k, the highest in five weeks.”