FXStreet (Bali) - Khoon Goh, Senior FX Strategist at ANZ, reviews the latest changes in specs positioning for the week ending 15 July 2014.
"The USD was sold almost across the board in the week ending 15 July by leveraged funds. This resulted in net short USD positions rising by USD1.4bn to USD3.5bn. The CFTC cut-off date occurred on the day that US Federal Reserve Chair Yellen hinted at the possibility of earlier than expected rate hikes. Hence, the data would have only partly captured investor reaction to the Fed Chair’s testimony."
"GBP was the only currency to have seen a reduction in net longs. This is the third consecutive week where net long positions were trimmed. Given that positioning still remains at extreme levels, the risk of a larger purge in positioning remains should there be a shift in sentiment towards the cable."
"Yen saw the largest net buying, which reduced overall JPY net short positions by 4.5k contracts (worth USD0.6bn) to 53.7k (worth USD6.6bn). Despite shifts in JPY positioning, USD/JPY continues to trade within a historically tight range."
"Leveraged funds increased their exposure to CAD, which had only swung to a net long position the previous week. This is despite weak employment data on 11 July which saw the loonie weaken."
"EUR net short positions reduced slightly by 1.7k contracts to 49.1k. It is notable that overall net short EUR positions have been fairly stable at around the 50k level for the past six weeks. The last time net short positions were at these levels was in May 2013 and EUR/USD was below 1.30."
"Positioning in NZD was little changed, but this was before the surprise 8.9% fall in the dairy auction prices and the softer than expected Q2 CPI print."
"Net long non-commercial position in gold fell for the first time in five weeks to 160.2k contracts from 170.1k. Net long positioning in WTI crude oil fell for the second consecutive week by 34.4k contracts to 400k."