USD sold, EUR shorts reduced - ANZ

According to the CFTC positioning data for the week ending 6 June 2017, leveraged funds sold the USD for the third consecutive week, albeit more modestly than in the previous two weeks. 

Key Quotes

“Overall net long USD positions were reduced by USD0.3bn to USD11.6bn, the lowest net long in 14 weeks. There could be a slight reversal in positioning as the USD is off its low ahead of the FOMC meeting this week even though a rate hike looks fully priced in.”

“Dollar selling was modest during the week. Funds reduced their net short EUR positions for the seventh consecutive week by a further USD0.1bn to USD0.1bn. Funds also reduced their net CHF shorts, by USD0.3bn to USD1bn.”

“However, USD buying was seen against the GBP ahead of the UK general elections. Funds added USD0.3bn to take their net short positions to USD0.7bn. We expect a further addition to net GBP shorts after the election, which saw the Conservative Party losing a majority support and the GBP tumbling. Funds also added marginally to their net short JPY positions, to USD3.2bn.”  

“Among commodity currencies, the best performer was the NZD. Funds reduced their net short NZD positions by USD0.3bn to turn slightly long (USD0.02bn), the first time in 11 weeks. However, funds reversed the previous week’s net buying by selling US0.2bn of AUD to take their net AUD shorts to USD0.8bn. Since the CFTC cut-off date, the AUD has traded somewhat better following the release of slightly better than expected Q1 GDP data on 7 June. Meanwhile, CAD shorts were cut by USD0.1bn to USD5.8bn.” 

“Funds were largely neutral on EM currencies as a whole. While they reduced their net BRL longs by USD0.2bn, they added the same to take their net MXN longs to USD1.9bn, the highest MXN long position since May 2013. RUB saw little change in positioning, with net longs remaining at USD0.8bn.”

“Net longs in 10-year UST were reduced for the second straight week, by 50k contracts to 198k contracts, in the run up to the FOMC meeting. Meanwhile, net longs in crude oil and gold picked up for the third consecutive week.”