USD shorts reduced, EUR longs fell back - Rabobank

According to the IMM net speculators’ positioning as at April 24, 2018, short USD net positions declined, most likely in response to the firmer tone of treasury yields.

Key Quotes

“Although speculators maintained shorts last week, the USD appears to be picking up support in the spot market.”

“EUR longs fell back sharply, having reached record highs the previous week. That said, longs remain at fairly elevated levels. The lack of hawkish commentary at last week’s ECB meeting prompted a softer tone for the EUR in the spot market.”

“Having risen to their strongest level since July 2014 the previous week, net GBP longs have dropped back. The release of a far weaker than expected UK Q1 GDP report has further knocked speculation of a BoE May rate hike, suggesting another fall in net speculators’ longs is likely in the next set of data.”

“Net JPY positions have been back in positive territory for four consecutive weeks, though they edged lower in the latest set of data.  Fears of trade wars, concerns about a military conflict between the US and Russia in Syria and domestic concerns regarding an Abe linked property scandal have all supported the safe haven JPY. Looking ahead, a calming of tensions on the Korean peninsula and hopes for a compromise between the US and China on trade may reduce support for the JPY.”

“CHF net shorts edged modestly lower last week. They remain only about half the size of the shorts registered in late January. Talk of CHF selling linked to the fresh US sanctions on Russia have been impacting the spot market.”

“CAD shorts dropped again last week. Focus has been on BoC policy although oil prices, Nafta and trade wars also remain in view. AUD shorts dropped back having surged the previous week as iron ore prices dropped.”