Dollar longs extended, CHF and GBP positioning bearish – Deutsche Bank

Research Team at Deutsche Bank notes that the latest IMM data suggest that investors extended US dollar long exposure to the highest level in the last year, taking implied USD longs as a fraction of open interest to 30.1% from 29.6%.

Key Quotes

“Conversely, investors extended GBP net shorts considerably and EUR net shorts marginally. Among the safe-haven currencies, CHF net shorts were extended moderately while JPY net shorts remained unchanged. Sentiment on the dollar bloc turned more bearish as investors extended their net short positions in AUD, NZD, and CAD. In line with G10 currencies, bearish positions in MXN also grew modestly.”

“Traders in Financial Futures data show that leveraged funds and asset managers agreed on the bullish USD outlook. Asset managers added to their implied dollar long position modestly and leveraged fund increased their implied long dollar exposure by a fifth. In EUR, leveraged funds extended their net shorts by a tenth, whereas asset managers increased their bullish exposure in EUR moderately. In GBP and JPY, leverage funds extended their short GBP exposure by almost a fifth while JPY shorts were extended by more than a tenth.”

“On the other side, asset managers added about a tenth to their short JPY position while extending their GBP net shorts modestly. In CHF, leveraged funds added to their short positions aggressively whereas asset managers pared their shorts marginally. In AUD, leveraged funds more than doubled their short exposure while asset managers extended their short positioning by a fifth. In NZD, net longs held by leveraged funds were cut considerably. In contrast, asset managers net short positioning remained almost unchanged.”

“In CAD, asset managers trimmed their net longs while leveraged funds almost doubled their short positions. Leveraged funds trimmed their long NZD exposure modestly while asset managers trimmed their short exposure at the margins. Elsewhere, in MXN, leveraged funds kept their net short positions unchanged while asset managers extended their net longs modestly.”