The latest positioning report from the CFTC showed that speculators are adding to their CHF short positions. Net positioning jumped from 36k to 43k short. The currency has benefited from the safe haven demand caused by the political crisis in Italy. However, negative interest rates and low rate expectations make the Swiss Franc unattractive in the medium- and long-term. CHF weakness is likely to resume in the near future.
Meanwhile, Euro bulls have not given up yet, but the unwinding of EUR long positions continues. Net positioning fell from 115k to 93k long. The key level to watch now is 1.15, as a break below would pave the way for further losses and likely cause another round of position covering by Euro longs.
No significant changes were seen in GBP positioning, as Cable is consolidating around 1.33. Net positioning stood at 9k long, an increase of 3k compared to the previous week.
Positioning in the commodity currencies remained stable as well:
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Soaring US yields trigger the wrecking ball effect as yields become a source of volatility for risk, rather than a source of support