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IMM Positioning: Room For EUR/USD Downside Yet Again

Published 08/31/2015, 06:02 AM
Updated 05/14/2017, 06:45 AM

As expected from the price movements seen in FX markets early last week, speculators unwound short EUR and long USD positions alike as the China-commodities sell-off accelerated last Tuesday .

Indeed, as we wrote in Market Collapse: What now? - Policy responses and market implications , the single currency is now largely acting as a funding currency and has thus increased its safe-haven appeal substantially of late. Overall, last week's positioning suggests there is again room for some EUR/USD downside - but we reckon the ECB may put a stop to the recent slide this week as Draghi is unlikely to commit to more easing at this stage.

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