Data in this report cover up to Tuesday August 23 & were released Friday August 26.
• Investors added to bullish CAD positions while paring short risk in EUR, JPY and CHF for the week ended Tuesday, the aggregate changes delivering a continued moderation in modestly bullish USD sentiment ahead of Jackson Hole. The aggregate USD position is muted at $7.1bn, well off the near-$15bn level from late July.
• CAD sentiment improved for the first week in four on the back of an accelerated pace of building in gross longs. Considerable CAD risk has been added to both sides over the past few weeks (bottom right p1), leaving freshly built positions vulnerable in the event of a break of the recent range. The net long $1.3bn position is also elevated at the upper end of its one year range (bottom right p2).
• Bearish EUR sentiment has moderated for a fourth consecutive week, the cumulative move delivering a $4.6bn narrowing in the net short position to $10.8bn. EUR remains the largest held net short and the bulk of the positioning adjustments continue to be driven by EUR bears. Meanwhile, GBP sentiment deteriorated for an 8th consecutive week, pushing the net short position to a fresh record. GBP appears vulnerable as shorts outnumber longs 3.6 to 1.
• JPY sentiment improved for a fourth consecutive week on the back of short covering and a build in gross longs. The bullish JPY position is relatively extended — net long $7.5bn at the upper end of its one year range, just shy of the $8.2bn from mid-April.