USD shorts edged lower, EUR longs fell back - Rabobank

According to IMM net speculators’ positioning as at May 01, 2018, short USD net positions edged a little lower for a second consecutive week most likely in response to the recent firmer tone of treasury yields.

Key Quotes

“Although the greenback has been slow to react to the pull of higher yields, the USD has been performing better in the spot market over the spring.”

“EUR longs fell back further, having reached record highs in April. That said, longs remain at fairly elevated levels. The lack of hawkish commentary at last month’s ECB meeting prompted a softer tone for the EUR in the spot market.”

“Having risen to their strongest level since July 2014 last month, net GBP longs have since dropped back significantly. The market no longer has much hope of a BoE May rate hike given signs that the UK economy is losing momentum.”

“CHF net shorts dropped sharply lower last week, returning to levels held at the start of the year.  This is likely related to the calming of tension on the Korean peninsula.”

“CAD shorts increased moderately but were essentially consolidative. Focus has been on BoC policy although oil prices, Nafta and trade wars also remain in view. AUD shorts increased as the RBA policy meeting signalled no imminent change in policy.”