USD shorts extended for the seventh consecutive week – Deutsche Bank

IMM data suggests that investors extended their short dollar positioning for the seventh week in a row taking it to its highest levels since early February 2013, notes the analysis team at Deutsche Bank.

Key Quotes

“Implied shorts as a fraction of open interest reached 21% from 18% in the previous week. Meanwhile, investors scaled back their short GBP exposure by a sixth while modestly adding to their long EUR positioning. Sentiment remained mixed in risk-off currencies, as speculators flipped their long CHF positioning to short while cutting their short JPY exposure by a sixth. In contrast, sentiment weakened among Antipodean currencies as investors scaled back their long exposure in both AUD and NZD. In CAD, speculators once again extended their long positioning to more than 50%, a fresh multiyear peak. Meanwhile investors cut their long MXN positioning as it retracted from its highest levels witnessed since May 2013.”

“Traders in Financial Futures data show that leveraged funds doubled their short USD exposure while asset managers cut their shorts modestly. In EUR, leveraged funds almost tripled their longs while asset managers trimmed their long positioning moderately. Both communities trimmed their short exposure in JPY and long exposure in CHF. In GBP, leveraged funds cut their short exposure almost by a third while asset managers extended their shorts by a tenth. Among the commodity currencies, leveraged funds extended their CAD positioning by more than three quarters while extending their AUD positions by a fifth. On the other side, asset managers trimmed their CAD longs moderately while extending their AUD shorts by 40%. In NZD, leveraged funds trimmed their longs while asset managers scaled back their shorts by a sixth. In MXN, leveraged funds cut their long MXN positioning moderately while asset managers added to their long MXN exposure.”