The latest CFTC report showed that there were some notable shifts in FX positioning, especially in the British Pound and Swiss Franc.
GBP net positioning decreased from 26k to 9k long. Given the large depreciation of the Pound in the recent weeks, it is surprising that large speculators are still net long the currency. However, it shows that market participants do not believe in the sustainability of the current Dollar rally.
Speculators added to CHF short positions, bringing net positioning to 33k (from 19k previously). The outlook for the currency is weak. There is little demand for safe havens at the moment, as risk appetite has improved. Further, rates are expected to remain negative for some time ahead, making the Franc unattractive.
Meanwhile, EUR net positioning remained stable at 121k long. Despite the 600 pips decline in April, Euro bulls remain confident that the currency will recover soon.
There were no significant shifts in positioning for the commodity currencies either. AUD net positioning stands at 6k short vs. 7k short previously. NZD net positioning fell from 17k to 13k long (likely to fall further following the RBNZ meeting last week). Speculators covered some of their CAD shorts due to the jump in oil prices, bringing net positioning to 24k short (vs. 28k short previously).
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