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2 Dec 2015
CFTC showed a market getting aggressively long USD - Scotiabank
FXStreet (Guatemala) - Analysts at Scotiabank noted the recent CFTC positioning data for the week through November 24th showed hedge funds and speculative investors building on aggregate long USD positions for a fifth consecutive week.
Key Quotes:
"Conviction that the ECB will deliver another round of stimulus (this week), just before the Fed is expected to boost interest rates, was bolstered by ECB President Draghi’s dovish comments on November 21st.
Investors added another USD3bn to the aggregate USD long position, as reflected in net long/short activity versus the major currencies, to take the total long bet on the USD to USD44.6bn, the largest bull bet on the USD since March.
The positioning jump may add to anxiety that the FX market may see considerable position adjustment/profit‐taking in the next few weeks.
Additional net EUR shorting activity accounted for about half of that positioning jump and the net short EUR position (USD23.3bn) still accounts for about half of the total aggregate position carried by IMM‐ based traders.
Elsewhere, investors covered net AUD shorts but added to net CAD longs, in sympathy with the short squeeze on that particular cross. Net NZD positioning remains limited.
GBP bears added another USD640 mn net to existing short positions.
"Net short JPY remains the second biggest net short bet reflected in these CFTC data but investors were reluctant to add to the USD7.9 net short total this week."
Key Quotes:
"Conviction that the ECB will deliver another round of stimulus (this week), just before the Fed is expected to boost interest rates, was bolstered by ECB President Draghi’s dovish comments on November 21st.
Investors added another USD3bn to the aggregate USD long position, as reflected in net long/short activity versus the major currencies, to take the total long bet on the USD to USD44.6bn, the largest bull bet on the USD since March.
The positioning jump may add to anxiety that the FX market may see considerable position adjustment/profit‐taking in the next few weeks.
Additional net EUR shorting activity accounted for about half of that positioning jump and the net short EUR position (USD23.3bn) still accounts for about half of the total aggregate position carried by IMM‐ based traders.
Elsewhere, investors covered net AUD shorts but added to net CAD longs, in sympathy with the short squeeze on that particular cross. Net NZD positioning remains limited.
GBP bears added another USD640 mn net to existing short positions.
"Net short JPY remains the second biggest net short bet reflected in these CFTC data but investors were reluctant to add to the USD7.9 net short total this week."