According to the IMM Net Speculators’ Positioning as at 06 June, 2017, USD longs increased slightly, breaking the trend of the previous five weeks which took positions to their lowest levels since last Oct – ahead of the Trump win in the Presidential election as noted by the analysts at Rabobank.
“The relatively soft level in long positions reflects domestic political concerns and some disappointments in domestic economic data. That said, the Fed is widely expected to hike rates this week.”
“Bearish bets against the pound increased for a second week marking a clear break from the trend that prevailed for the previous six weeks. Opinions polls had been suggesting that the Labour opposition was gaining momentum ahead of the June 8 UK general election and the failure of the Tory government to win a majority increases the likelihood of a more messy Brexit process. That said, GBP is being supported by speculation that a ‘soft’ Brexit may now be more likely.”
“EUR longs remained on their upward path last week. Macron’s success in the weekend’s French parliamentary election suggests there may be scope for some further gains in the next data snapshot, although the dovish tone of the ECB at last week’s policy meeting could be a setback for the bullish tone. EUR positions are at their strongest level since May 2011.”
“JPY shorts edged a little higher for a second week suggesting an unwind of safe haven demand. That said, geopolitical uncertainty in the Gulf region, political uncertainty in the US or further testing of nuclear missiles by N. Korea could again offer support to the JPY going forward. No policy change is expected from the BoJ this week.”
“CHF shorts dropped moderately. The improvement in the Eurozone economy should over time reduce safe haven demand for the CHF.”
“CAD shorts dropped for a second week, in contrast to the twelve week trend that dominated the spring. The outlook for price of oil remains a key influence. AUD positions fell into negative territory for the first time since mid-January. Better that expected Australian Q1 GDP growth data should provide some support in the next data release.”