USD longs grew, EUR short positions increased - Rabobank

According to IMM Net Speculators’ Positioning as at August 28, 2018, USD speculators’ long positions grew for the seventeenth consecutive week, notes the research team at Rabobank. 

Key Quotes

“Broad-based support for the USD reflects heightened capital outflows from emerging markets and an indication from the FOMC that rates could be increased by a total of 4 times this year.”

“EUR short positions increased further. They have been retreating for a while on the guidance from the ECB that rates may not be raised until at least summer 2019. Concerns about Italy’s budget have also been growing.”

“GBP shorts grew for a sixth straight week as concerns that Brexit negotiations are stalling weighed. PM May continues to be undermined by members of her own party reflecting her weak position.”

“Net JPY short positions have shrunk for five consecutive weeks. Although fears of trade wars did not trigger much safe haven demand for the JPY earlier this year, continued pressure on EM markets has recently lent support.”

“CHF net shorts have consolidated at fairly high levels in recent weeks. The SNB remains committed to ultra-accommodative policy and this has been diverting safe haven flow related to this year’s sell off in EM currencies into the USD.”

“CAD shorts have edged down to their lowest levels since mid-June. The BoC policy meeting and NAFTA talks are in view this week.”

“AUD shorts have dropped back from recent highs but remain at elevated levels. US/China trade tensions have weighed on confidence and the RBA remains cautious on its policy outlook.”