USD longs edged higher, EUR shorts fell – Rabobank

Jane Foley, Senior FX Strategist at Rabobank, lists down the IMM net speculators’ positioning as at 13 September 2016.

Key Quotes

“For the third consecutive week bearish bets against the pound edged lower encouraged by the better tone of recent UK data releases. That said, the dovish tone expressed by the BoE last week may hinder this reversal.

EUR shorts fell back again last week. The previous week ECB President Draghi had indicated that the Governing Council had not discussed an extension of QE at the September policy meeting.

USD longs edged higher for a second week. Although the market remains skeptical about the prospect of a rate hike from the FOMC this year, some Fed officials have aired a hawkish tone and US longs are still below the levels recorded in early August.

Net JPY longs edged higher last week but remain below their August levels. Hope has re-emerged that BoJ easing may be extended at the September policy meeting but this is mixed with fear that BoJ policy action may be reaching the end of the road.

CAD net longs fell for a third consecutive week as oil prices edged lower. The level of AUD longs fell for a third week. The carry trade has been a strong support for the AUD and this week the market will be focusing on the minutes of the RBA policy meeting in addition to the FOMC.”