- Long USD unwind continues.
The DXY dollar index is back near the low end of its recent 80.4-84.8 range, as investors continue to unwind long positions. Net long USD positions are now back at USD16bn after peaking above USD43bn in early June.
- Investors are again long NZD.
The biggest USD unwind as a share of open interest was against NZD with net positions jumping 15% to 2% of open interest.
- EUR longs back above historical average.
Long euro positions were built further and as of last Tuesday, when the IMM data was collected, stood at 7% of open interest – slightly above the post-2000 average of 6%.
- No sign of GBP shorts being unwound.
Since the Bank of England presented its new forward guidance policy GBP has appreciated against all G10 currencies but NZD and AUD, and more than 1.5% against the euro and dollar. Unwinding of stretched GBP shorts is likely to have been driving this move but looking at the latest IMM data there is little indication of a change in positioning. This suggests either: (i) that the IMM data is not a good proxy of GBP positioning at the moment, or (ii) that there is more upside potential in GBP from re-positioning if UK data remain stronger than expected.
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