Speculators Cut Yen Shorts
Axi | Aug 14, 2017 12:56
Originally published by AxiTrader
The latest data from the CFTC shows that speculators have added to their short dollar positions.
Euro net positioning increased from 83k to 93k long. Market participants expect a further increase in the euro exchange rate, due to the decreasing divergence between the US and Euro Zone economy.
Meanwhile, pound net positioning decreased from 29k to 25k short. However, the pound is likely to remain under pressure amid on-going uncertainties around Brexit and the negotiations between the UK and the European Union. Further, recent UK economic data were rather disappointing, which suggests that the Bank of England will likely remain on hold for a while.
Yen net positioning fell from 112k to 96k short. The Japanese yen caught a bid amid the risk-off sentiment in markets. Geopolitical tensions could keep the yen supported in the short-term, but the overall outlook remains negative as the Bank of Japan will keep its QE programme intact in the near future.
Canadian dollar net positioning jumped from 41k to 63k long. Speculators are still bullish on the Canadian dollar, although USD/CAD managed to recover since it bounced off the major support level at 1.2460. While the outlook for the Canadian dollar remains positive, the market might have too high expectations. USD/CAD is heavily oversold, and the current risk-off sentiment is not benefiting the Canadian dollar.
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There were no large changes in Australian dollar and New Zealand dollar positioning. Speculators are net long the Aussie dollar at 58k vs 61k in the previous week. NZ dollar net positioning stands at 33k long vs 35k long in the prior week.
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