Dollar longs trimmed again, Sterling shorts at record highs – Deutsche Bank

Research Team at Deutsche Bank, notes that according to the latest IMM Commitment of Traders report, investors reduced their bullish exposure to the US dollar yet another week pushing implied USD longs as a fraction of open interest to 13.1% from 15.5%.

Key Quotes

“The trend increase in JPY net longs and reduction in EUR net shorts continued. At the same time, investors added modest shorts in CHF shifting its position from net longs to net shorts. Meanwhile, GBP net shorts have increased further and extended the record bearish positioning. In the commodity currencies, investors were more bullish on AUD as large amount of gross longs were added, whereas net longs in CAD were trimmed for a third consecutive week. NZD positioning remained almost unchanged in the week. Elsewhere, bearish sentiment in MXN reduced as investor’s added decent amount of net longs.

Traders in Financial Futures data show that leveraged funds have reduced their implied dollar longs modestly, whereas implied dollar shorts held by asset managers was ramped up significantly. In EUR, leveraged funds have been aggressively paring their net shorts, whereas asset managers have added to their net longs.

In GBP, both the communities have maintained their bearish positioning by adding massive amount of gross shorts consistently during the past few weeks. Leveraged funds increased bullish bets in JPY, while extending CHF net shorts. Meanwhile, asset managers reduced their bearish sentiment in the safe haven currencies, while shifting CHF positioning to net longs from net shorts.

Leveraged funds were more bearish in CAD after investor’s added large amount of net shorts, whereas asset managers increased their bullish sentiment. In the Antipodeans, leveraged funds were more bullish on both AUD and NZD; By contrast, asset managers trimmed AUD net longs while adding net shorts in NZD. In MXN, leveraged funds pared their net shorts considerably, while asset managers added a decent amount of net longs.”