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USD Bulls Are Everywhere‏

ByDanske Markets
Published 07/15/2013, 07:02 AM
Updated 05/14/2017, 06:45 AM

The latest IMM data covers the week from 2 July to 9 July.

Speculators turned USD bullish ahead of last week's FOMC minutes and Bernanke's dovish comments . While still somewhat below the peak seen in overall USD positioning in early June, it appears from IMM data that investors are increasingly positioning for the structural USD upturn that we indeed look for (note that we will publish our updated FX forecasts later today). It is likely however that some USD longs were liquidated following the dovish Fed comments (Bernanke, Bullard/Williams) late last week. This suggests that the potential for EUR/USD to move higher when Bernanke speaks later this week may be limited even if the FOMC stance might be on the soft side.

For JPY, AUD and NZD short positioning has become increasingly stretched of late and while we still look for these three to weaken further against USD , positioning underlines that e.g. the AUD plunge may take a breather as we have indeed seen today after the Chinese data turned out less dismal than some may have feared. The RBA remains happy to let Aussie drop further so do not expect any stabilisation to prove long-lived however.

More GBP shorts were added after new Bank of England governor Carney's July statement but there should be room for more GBP downside if we are right in expecting more explicit forward guidance at the August meeting. But should Carney fail to draw a line in the sand on BoE policy, there is certainly potential for sterling to stage a rebound.

To Read the Entire Report Please Click on the pdf File Below.

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