FEW CHANGES IN SENTIMENT AS AUD SWINGS TO NET LONG
Data in this report cover up to Tuesday Jan 17 & were released Friday Jan 20.
• Positions in most of the major currencies were largely unchanged on a w/w basis, with the G4 currencies EUR, JPY, and GBP dominating as the largest held net shorts (bottom p2). AUD was the only currency to register a notable ($0.7bn) w/w swing, becoming the only currency held net long vs. the USD. The aggregate USD long remains elevated, at $27.0bn
• Investors left their CAD positions relatively unchanged into this week’s BoC events, adding modestly to both gross long and gross shorts in a manner that delivered a slight narrowing in the net short CAD position to $0.4bn. AUD saw the largest w/w swing among the major currencies, pushing into net long territory with a +$0.7bn w/w jump to $0.4bn.
• EUR remains the largest held net short with an $8.9bn position. Longs remain historically extended and shorts appear muted relative to recent levels. EUR appears vulnerable to a broader turn.
• GBP sentiment has held steady for two weeks, the third largest of the net shorts with a $5.1bn position. This week’s position adjustments were remarkably limited in relation to the headline-driven movements in response to PM May’s Tuesday speech.
• Investors added to JPY risk, building both long and short positions in an equal manner that left the net largely unchanged. Longs are closer to their historical lows and shorts are well off their recent extended lows, hinting to the potential for a continued narrowing in net.