USD longs dropped, EUR longs continued to grow - Rabobank

The research team at Rabobank, notes that according to the IMM net speculators’ positioning as at 30 May, 2017, USD longs have dropped while the EUR longs continued to grow.

Key Quotes

“EUR longs continued to grow last week although the pace of the gains was slower than the previous week potentially on the back of recent fears of an early Italian election and dovish commentary from ECB President Draghi. EUR positions are now at their strongest level since May 2011.”

“JPY shorts edged a little higher last week but remained essentially consolidative. The JPY remains sensitive to safe haven flows. 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.”

“USD longs dropped for a fourth consecutive week and are at their lowest levels since last Oct – ahead of the Trump win in the Presidential election. The fall in long positions reflects domestic political concerns and some disappointments in domestic economic data. The softer than expected US May payrolls report could weigh on the USD in the next CFTC snapshot.”

“Bearish bets against the pound increased last week countering a trend that prevailed for the previously six weeks. Opinions polls are suggesting that the Labour opposition is gaining momentum ahead of the June 8 UK general election. This reduces the likelihood of a strong government in the UK and may increase the likelihood of a more messy Brexit process.”

“CHF shorts edged lower for the second consecutive week. The improvement in the Eurozone economy should over time reduce safe haven demand for the CHF.”

“CAD shorts dropped modestly, breaking a twelve week trend. The outlook for price of oil remains a key influence. AUD long positions edged a little higher. Iron ore prices remain in view though the RBA policy meeting will also be a focus for the next set of data.”