USD longs extended, EUR shorts close to YTD highs – Deutsche Bank

Research Team at Deutsche Bank, notes that the IMM data suggests that investors have extended their long dollar exposure, taking implied USD longs as a fraction of open interest to 18.4% from 16.4% in the previous week.

Key Quotes

“Investors extended their net short position in EUR for the fifth straight week, pushing shorts close to YTD highs. In GBP, speculators pared their short exposure at the margin before the High Court ruling regarding Brexit. Investors extended their short position in CHF once again while long exposure in JPY was scaled back marginally. Investors remain bullish on AUD and have added aggressively to their long position while extending their net short exposure in NZD and CAD. Meanwhile, investors turned bearish on MXN amid uncertainties before the US Presidential election this week.

Traders in Financial Futures data show diverging views about the dollar between the real money and hedge fund community. The latter added to their implied dollar long position while asset managers extended their implied dollar short exposure aggressively. Leveraged funds continue to be bearish on EUR as they added to their net short position. In contrast, asset managers extended their net EUR longs by a fifth. In JPY, leveraged funds extended their net longs marginally while asset managers cut their short positions modestly.

Meanwhile in CHF, leveraged funds extended their short position, while asset managers’ short position flipped to a modest net long exposure. Leveraged funds added to their net short CAD positions while extending long NZD exposure marginally.

Meanwhile, asset managers reduced net long CAD positions considerably, while extending their NZD short position at the margin. In AUD, leveraged funds added to their net long AUD positions once again while asset managers pared their net longs modestly. Elsewhere in MXN, Leveraged funds cut their net shorts while asset managers doubled their net long exposure.”