USD longs fell, EUR shorts halved – Rabobank

Analysts at Rabobank list down the IMM net speculators’ positioning as at 21 March, 2017.

Key Quotes

“EUR shorts more than halved last week to their lowest level since May 2014. The move comes on the heels of better Eurozone economic data and the Dutch election result which denied populist Wilders the opportunity to become PM. Also, supporting short-covering pressures are French opinion polls which suggest that the far-right’s Le Pen is unlikely to win the Presidency this spring.”

“USD longs fell back for a second consecutive week on the lack of hawkish commentary from the FOMC earlier in the month and on concerns about the Republican’s healthcare bill. The failure of the healthcare reform suggests scope for further pressure on USD longs in the next set of data.”

“JPY shorts fell back last week after the BoJ policy meeting. Speculation of stealth BoJ tapering and safe haven demand on concerns about the US’s reflationary programme suggest further short covering is likely.”

“Bearish bets against the pound ticked higher. Shorts have soared to multi-year levels as the start of the Brexit process approaches suggesting that there is now a lot of bad news in the price.  PM May is due to trigger Article 50 of the Lisbon Treaty on March 29 and start the Brexit process.”

“CHF shorts edged higher last week potentially on concerns regarding the US healthcare bill.”

“CAD positions plunged into negative territory last week as oil prices came under pressure. AUD long positions found some support. A fall in risk appetite threatens to limit upside potential for the AUD.”