CFTC: Short Dollar Reduced - ANZ
Analysts at ANZ explained the positioning data for the week ending 3 May 2016.
"Leveraged funds continued to stay short against the USD for the second consecutive week. However, the size of their overall short position was reduced by USD0.7bn to USD2.9bn. This was despite the period that the positioning data covered, which saw the DXY decline to a new recent low of 91.9.
We suspect the reduction in net short USD positions were due to profit taking. The rebound in the USD after the CFTC cut-off date suggests there could have been a further unwinding of USD long positions. The net dollar buying was mainly against JPY and AUD.
Surprisingly, there was a decrease in net long JPY positions by USD1.7bn to USD3.4bn. This is surprising given the strong rally in the yen following the 28 April BoJ decision where rates were left unchanged against market expectations.
The net selling of the AUD totalling USD0.8bn was easier to explain following the surprisingly weak Australian Q1 CPI print and the surprise rate cut by the RBA on 3 May. Expectations of further rate cuts by the RBA will likely see net long positions in AUD reduced further (see Figure 10 in PDF). The other two commodity currencies recorded increases in their net long positions by USD0.4bn for CAD.
EUR and GBP saw the largest net buying at USD0.8bn each. This reduced leveraged funds’ overall net short positions in both the currencies to USD4.4bn and USD1.6bn respectively. Easing concerns over Brexit were partly behind the positioning change in the GBP.
EM currencies also saw marginal buying against the USD. MXN recorded net buying of USD0.3bn as leveraged funds turned net long again. The RUB saw marginal net buying, whereas BRL saw mostly an unchanged position from last week.
We also note that net long positions in gold rose to a record high of 300k contracts."