FXStreet (Bali) - ANZ's Senior FX Strategist Khoon Goh reviews the latest CFTC speculative positioning for the week ending 8 July 2014, noting that net short USD positions were reduced by USD0.4bn to USD2.1bn.

Key Quotes

Net short USD positions were reduced by USD0.4bn to USD2.1bn. The much stronger than expected June non-farm payrolls print (288k vs 215k expected) on 3 July most likely triggered some short covering, as leveraged funds had been increasing their short bets against the USD for the three weeks prior.

The upgrade to New Zealand’s AA sovereign rating outlook to positive by Fitch on 8 July no doubt contributed to the 3.7k increase in the NZD’s net long position to 12.7k. Despite NZD/USD coming just shy of its post-float highs, positioning is not stretched. In August 2011 when the kiwi reached the high of 0.8840 against the USD, net long positions reached a peak of 22.4k. This suggests there is still scope for further buying by leveraged funds to push NZD/USD to fresh highs.

Positioning in CAD turned net long for the first time since February 2013.Net positions rose by 8.8k contracts worth USD0.8bn in the week, the third consecutive week where there was strong net buying of CAD by leveraged funds.

EUR net short positions rose slightly by 1.2k contracts to 50.8k, while net long AUD positions were reduced by 2.2k to 40.4k partly in response to RBA Governor Stevens’ 3 July speech which noted that investors are underestimating the likelihood of a significant fall in the AUD at some point.

Net long GBP positions were trimmed by 4k contracts but this most likely reflected some profit taking. Leveraged funds have a net long position in GBP of USD12.4bn, the most among the currency contracts traded.

Net long non-commercial position in gold rose again for the fourth consecutive week to 170.1k contracts, up 1.8k in the week. Falling oil prices saw a reduction in non-commercial net long positioning in WTI crude oil by 29.5k contracts to 434.4k. Subsequent falls in oil prices since the CFTC cut-off date suggests a further paring back of long speculative oil positions.

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