CAD & EUR bullish sentiment increases, JPY bears pull back - Scotiabank

According to the IMM data covering up to Tuesday August 8, the latest snapshot of speculative FX positioning shows investors continue to add to USD short positioning in aggregate, notes the analysis team at Scotiabank.

Key Quotes

“With a further build in the overall USD short amounting to some USD4.5bn this week; the aggregate bear bet on the USD extends to USD15.6bn this week, the largest since 2013.”

“CAD bullish sentiment continues to strengthen, accounting for a good chunk of the build of bearish bets on the USD in aggregate. Net CAD longs rose USD1.7bn, or some 20k contracts, and now total nearly USD5bnm (62k contracts). This is the biggest net long CAD position in the market since January 2013.  Recall that just three months ago, speculators held a record net short CAD position of just over 99k contracts.  Gross CAD shorts are covering reluctantly while gross long CAD positions are building more rapidly.”

“Elsewhere, JPY short covering extended a little further, with gross shorts falling while gross long positions were broadly stable.  In net terms, the JPY short positions fell by some 16k contracts this week, adding to aggregate pressure on bearish USD positioning to the tune of USD1.8bn. EUR bulls upped exposure in net terms by 11k contracts (adding another USD1.6bn to the aggregate USD short) to 93.6k, the biggest bull bet on the EUR since 2011.”

“Position changes in other major currencies were relatively small, leaving positioning mostly neutral.  Gold bulls remain active, however, adding aggressively to exposure.”