The research team at ANZ explains that the leveraged funds turned net sellers of USD while they were net buyers of the EUR according to the CFTC’s positioning data for the week ending 25 April 2017.
“Leveraged funds turned net sellers of USD after three consecutive weeks of net buying. Net selling was to the tune of USD1bn, reducing the overall net long position to USD16.3bn. President Trump’s new tax plan couldn’t help lift positioning as it was unveiled after the cut-off date. However, the US Federal Reserve’s tone in the upcoming FOMC meeting will likely impact positioning in the coming weeks.”
“GBP saw the largest net buying during the week as expectations of a ‘soft’ Brexit gathered momentum. Funds reduced their net short GBP position by USD1.2bn to USD2bn, the second consecutive week where short positions were reduced.”
“Leveraged funds turned net buyers of the EUR after being net sellers in the previous three weeks. This was on the back of the results of the first round of the French presidential election. Overall net EUR short positions were reduced by USD0.6bn to USD12.5bn.”
“Funds added USD1.1bn to take their net JPY longs to USD2.8bn as geopolitical risks around North Korea remained high. However, net short CHF positions were raised by USD0.1bn to USD1.9bn, for the third week running.”
“Net selling of commodity currencies continued following the previous week’s pause. This was led by CAD which saw net short positions rise by USD1bn to USD4.4bn, partly on news of the US imposing tariffs on Canadian lumber imports. AUD saw net selling for the fourth consecutive week, reducing overall net long positions by USD0.7bn to USD2bn. NZD only saw marginal selling.”
“EM currencies saw a seventh straight week of buying, albeit at a slower pace than the previous week. Funds raised their net MXN, RUB and BRL longs by a combined USD0.1bn.”
“Net long UST positions rose to its highest level since March 2008. Meanwhile, net long crude oil and gold positions fell during the week, after three and five consecutive weeks of net buying, respectively. This is in line with falling commodity prices during the week.”