USD selling resumed, EUR saw the largest net buying - ANZ

According to the positioning data for the week ending 22 August 2017, USD selling resumed as leveraged funds increased their overall net short USD positions by USD1.1bn to USD6.9bn, notes Khoon Goh, Head of Asia Research at ANZ.

Key Quotes

“With the DXY falling further to end the week near the lows last seen in May 2016, it is likely that short dollar positioning would increase further this week.”

“EUR saw the largest net buying in the week, a complete reversal of the previous week. Funds increased their net long EUR position by USD1.9bn to USD3.5bn in the lead-up to the Jackson Hole symposium. ECB President Draghi’s speech at Jackson Hole steered clear of commenting on the euro, which was read by the market as a green light to push EUR/USD past the 1.19 level.” 

“JPY benefited from dollar weakness, with funds reducing their net yen short positions for the fifth consecutive week by USD0.3bn to USD6.9bn. GBP on the other hand, could not capitalise on weak dollar sentiment. Funds increased their short GBP positions by USD1.0bn to USD2.2bn. Funds also reduced their net CHF longs marginally in the week.” 

“Among the commodity currencies, AUD and CAD saw net buying totalling USD0.3bn, which was totally offset by NZD net selling of that amount. Overall net long AUD positioning increased for the eleventh consecutive week to reach the highest since April 2013. The last time leveraged funds were positioned this long in CAD was in January 2013. NZD saw the fifth consecutive week where net long contracts were reduced.”

“EM currencies saw combined net buying of USD0.3bn during the week. MXN saw its overall net long positioning rise to USD2.7bn from USD2.5bn previously.”

“Among the selected rates and commodities positioning we monitor, only crude oil saw a decline in contracts of 15.5k. This is the third weekly decline. Net longs in gold rose for the sixth straight week to reach its highest level since October 2016.”