Dollar longs scaled back ahead of Trump inauguration – Deutsche Bank
Analysts at Deutsche Bank note that the latest IMM data suggest that speculators have pared their US dollar long exposure marginally, cutting implied USD longs as a fraction of open interest to 31.2% from 32%.
Key Quotes
“Bearish positions in GBP extended for the fourth week as investors added to their net short positions ahead of Theresa May’s Brexit speech, albeit marginally. Similarly, in EUR, investors added to their net short position at the margin. Investors reduced risk moderately in the safe haven currencies by trimming their net shorts positions. In the dollar bloc, AUD positions flipped to net longs from net shorts after investors cut down their gross shorts significantly. At the same time, investors trimmed their net short exposures in both CAD and NZD. Elsewhere, investors continued to be bearish MXN extending their net shorts modestly to be the highest since mid-October.”
“Traders in Financial Futures data show that leveraged funds reduced their implied long dollar exposure by almost a tenth, while asset managers reversed their derived USD positions to net shorts from net longs. Sentiment in the safe haven currencies improved as leveraged funds pared their net shorts in both JPY and CHF. Meanwhile, asset managers reduced their net shorts in JPY while flipping CHF positions to net longs from net shorts.”
“In EUR and GBP, leveraged funds trimmed net shorts in the former while adding net shorts in the latter currency. Meanwhile, asset managers extended EUR net longs by a fifth, while trimming GBP net shorts by one-tenth. Outlook for the dollar bloc currencies improved as leveraged funds cut AUD net shorts by half while trimming CAD net shorts 1.5 times.”
“Meanwhile, asset managers switched their AUD positioning to net longs from net shorts, while extending their CAD net long exposure moderately. Sentiment in NZD remained largely unchanged. Leveraged funds were more bearish MXN after extending their net shorts, whereas asset managers added to their net longs.”