CFTC Position Watch: Speculators add to CAD short positions ahead of BoC rate decision

The latest CFTC report showed some minor shifts in FX speculative positioning.

After several weeks of cutting EUR short positions, speculators have added 3k in long positions in the previous week, bringing net positioning to 37k long. Euro bulls are showing a bit of optimism after the major support level at 1.15 held. Volatility is expected to remain high this week, with several ECB members scheduled to speak.

Meanwhile, speculators added to GBP short positioning. Net positioning currently stands at 29k, an increase of 7k compared to the previous week. Given the political uncertainty in the country, the pressure on the British Pound is likely to increase in the near-term.

JPY net positioning remained relatively stable at 39k, an increase of only 3k compared to the week before. Concerns about a potential trade war have declined somewhat, which reduced the demand for the safe haven JPY.

Some notable changes in commodity FX positioning:

• CAD net positioning 49k short vs 33k short previously
• AUD net positioning 39k short vs 41k short previously
• NZD net positioning 26k short vs 18k short previously

Speculators might have turned too bearish on the Canadian Dollar too quickly, considering the recent USD weakness, BOC expectations and rising oil prices.

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