USD longs edged back, EUR shorts fell back - Rabobank

Jane Foley, Senior FX Strategist at Rabobank, lists down the IMM net speculators’ positioning as at 08 November 2016.

Key Quotes

“The reported level of net USD longs edged back from the previous week’s strength on uncertainty about the US election result. While the surprise result initially pressured the greenback lower in the spot market, long positions will likely be higher in the next set of data given the market’s anticipation of inflation.”

“Bearish bets against the pound recovered some ground having dropped back during the four previous weeks. The outcome of the UK High Court ruling that specifies that parliament and not the government has the power to trigger Brexit should support hopes that a ‘hard’ Brexit could be avoided.”

“EUR shorts also fell back having returned to levels last recorded in January the previous week. At the October Council meeting, ECB President Draghi commented that QE would not end abruptly and thus signaled that the asset purchases programme could be extended beyond the current March 2017 end date.”

“Net yen longs dropped ahead of the US election result. The subsequent recovery in the USD is likely to keep yen longs under pressure.”

“CAD net shorts increased as oil prices came under pressure. The level of AUD longs grew for a seventh consecutive week following the RBA’s steady policy decision on November 1. Concerns about the impact on China of US protectionism policies, however are set to keep the AUD nervous.”