30 Oct 2013
Flash: USD Positioning getting short, but mainly versus Euro - Nomura
FXstreet.com (London) - Global FX strategists at Nomura signal that US weakness is linked to the postponement of tapering.
Key Quotes:
“The recent depreciation over the last three months has been significant (the DXY is down almost 3% over the period)”.
“The weakness in US is linked to the postponement of tapering at the September Fed meeting, the uncertainty created by the fiscal negotiation and the threat of default, and more recently by the expectation that the government shutdown means a further delay in the timing for tapering”.
“Meanwhile, Dollar speculative positioning has switched from being very net long to net short during the previous months.. The latest official data point is as of October 8, at which point USD was -$4.6bn, whereas it had been as high as $23.5bn on September 10”.
"Our real time estimates suggest that USD shorts stand at -$11.3bn as of 10/29".
“While not as extreme as in early 2013 (and late 2012), the position is much more concentrated in EUR longs, which are now at par with the peak from Q2 2011 (when the ECB was hiking rates)”.
“While USD has depreciated notably in recent month, it is still in the middle of the trading ranges observed for the past 2 years, and the data picture remains very mixed, making it difficult to call a near-term turn in signals from the Fed and the US yield curve”.
Key Quotes:
“The recent depreciation over the last three months has been significant (the DXY is down almost 3% over the period)”.
“The weakness in US is linked to the postponement of tapering at the September Fed meeting, the uncertainty created by the fiscal negotiation and the threat of default, and more recently by the expectation that the government shutdown means a further delay in the timing for tapering”.
“Meanwhile, Dollar speculative positioning has switched from being very net long to net short during the previous months.. The latest official data point is as of October 8, at which point USD was -$4.6bn, whereas it had been as high as $23.5bn on September 10”.
"Our real time estimates suggest that USD shorts stand at -$11.3bn as of 10/29".
“While not as extreme as in early 2013 (and late 2012), the position is much more concentrated in EUR longs, which are now at par with the peak from Q2 2011 (when the ECB was hiking rates)”.
“While USD has depreciated notably in recent month, it is still in the middle of the trading ranges observed for the past 2 years, and the data picture remains very mixed, making it difficult to call a near-term turn in signals from the Fed and the US yield curve”.