According to the latest CFTC Commitments of Traders Report, for the week ending Tuesday, January 27th.there was a certain reluctance among investors to keep pushing the bearish USD strategy, notes the FX Team at TDS.
Key Quotes
"CFTC data for the week through January 27th showed a certain reluctance among investors to keep pushing the bearish USD strategy that has prevailed in the past few weeks. Aggregate positioning continued to retreat, with the overall USD long position implied by market positioning in the major currencies declining to USD 46.1bn this week, the lowest in four weeks."
"Positioning in the EUR contract continues to do the heavy lifting of positioning; investors added to net short exposure in the latest week, taking the position to –184.7k contracts, 4k contracts larger than the January 20th week’s data and a new high. Positioning in the EUR accounts for more than half of the aggregate long USD position in the market."
"Elsewhere, however, investors were less inclined to extend positioning. For the JPY, the sideways range trade in that market makes the drop in net positioning understandable; market exposure fell sizably to a net short of –64.6k contracts, down from –77.8k contracts last week. This is the lowest net JPY short this market has carried since July."
"Despite big moves in the spot market, investors were reluctant to extend short exposure to the commodity bloc; net CAD shorts actually fell to –23.9k this week from –29k in the prior week. Coincidentally, the CAD did bounce on Tuesday but gains were short lived and the renewed decline in the currency suggests that, once again, a large part of the market is not participating as much as it might in the slide. Net positioning in the AUD at –48.9k contracts is little changed on the week and net positioning in the NZD, while up sharply from the prior week, remains relatively small (just a net short of –3.6k contracts this week)."
"Net CHF shorts were trimmed again this week, naturally, to –7.3k contracts (-9.8k last) but investors are clearly reluctant to embrace the CHF. Net GBP positioning was largely flat (-45k contracts), as was the MXN (-44.5k), on the week."
Key Quotes
"CFTC data for the week through January 27th showed a certain reluctance among investors to keep pushing the bearish USD strategy that has prevailed in the past few weeks. Aggregate positioning continued to retreat, with the overall USD long position implied by market positioning in the major currencies declining to USD 46.1bn this week, the lowest in four weeks."
"Positioning in the EUR contract continues to do the heavy lifting of positioning; investors added to net short exposure in the latest week, taking the position to –184.7k contracts, 4k contracts larger than the January 20th week’s data and a new high. Positioning in the EUR accounts for more than half of the aggregate long USD position in the market."
"Elsewhere, however, investors were less inclined to extend positioning. For the JPY, the sideways range trade in that market makes the drop in net positioning understandable; market exposure fell sizably to a net short of –64.6k contracts, down from –77.8k contracts last week. This is the lowest net JPY short this market has carried since July."
"Despite big moves in the spot market, investors were reluctant to extend short exposure to the commodity bloc; net CAD shorts actually fell to –23.9k this week from –29k in the prior week. Coincidentally, the CAD did bounce on Tuesday but gains were short lived and the renewed decline in the currency suggests that, once again, a large part of the market is not participating as much as it might in the slide. Net positioning in the AUD at –48.9k contracts is little changed on the week and net positioning in the NZD, while up sharply from the prior week, remains relatively small (just a net short of –3.6k contracts this week)."
"Net CHF shorts were trimmed again this week, naturally, to –7.3k contracts (-9.8k last) but investors are clearly reluctant to embrace the CHF. Net GBP positioning was largely flat (-45k contracts), as was the MXN (-44.5k), on the week."
