Takeaways From This Week's COT Report: Paring EUR Risk, Bullish AUD
Data in this report cover up to Tuesday Feb 23 & were released Friday Feb 26.
A broad-based deterioration in USD sentiment has pushed the aggregate USD long position to $7.6bn at levels last seen in midJuly 2014. Investors have added to net long positions in AUD and JPY, and have simultaneously pared back net shorts in all of the remaining currencies. Positioning risk has been reduced dramatically over the past few months, with a $37bn decline in the aggregate USD long in the period since late November.
Investors have pared risk in EUR, simultaneously reducing both long and short positions. The modest narrowing in the net short was the smallest position change in 7 weeks, however it still pushed the net short position to its smallest level since June 2014.
The build in JPY risk is notable, adding to JPY’s vulnerability as we consider the simultaneous rise in both long and short positions over the past two weeks. The bullish, net long $5.9bn JPY position is at levels last seen in 2012.
CAD sentiment has improved for a second consecutive week, the net short position narrowing $0.6bn to $2.7bn at levels last seen in mid-November. Details include a steady liquidation in CAD shorts alongside renewed confidence from CAD bulls—we note a second weekly build in gross longs.
Similar details have been observed in the position changes for AUD—the rise in longs and paring in shorts has provided for a cumulative $3.2bn swing over the past five weeks, pushing AUD sentiment into bullish territory with a modest $0.7bn net long position.
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