USD longs crept a little higher, EUR shorts edged lower – Rabobank

Jane Foley, Senior FX Strategist at Rabobank, lists down the IMM net speculators’ positioning as at 06 December 2016.

Key Quotes

“Net USD longs crept a little higher last week to reach their highest levels since August 2015. The tone taken by Fed Chair Yellen at the December14 FOMC meeting should set the tone for the coming weeks.”

“Bearish bets against the pound dropped moderately last week. GBP has adopted a fairly binary set of reactions to UK political news dependent on whether it is deemed to support a ‘hard’ or ‘soft’ Brexit. The market appears to be evaluating the risk of a hard Brexit as noticeably lower than in October.”

“EUR shorts edged lower ahead of last week’s ECB policy meeting. Although there was some confusion in the market as to whether the ECB has started to taper its asset purchases, ECB President Draghi eventually succeeded in communicating a dovish tone during the post meeting press conference.”

“Having turned negative for the first time since December 2015 last week, net yen shorts soared last week. The recovery in the USD is the primary factor behind this move.”

“Net CHF shorts edged even higher last week on the back of the stronger USD.”

“CAD net shorts dropped a little ground but held mostly steady. Oil prices are in focus. The level of AUD longs dropped back very slightly. This weakness of the Australian Q3 GDP data could apply more pressure.”