CAD SHORT COVERING ACCELERATES
• This week, traders favoured adding to USD long positions, driving the net position to $18bn.
• The moderation in bearish CAD sentiment has accelerated, with a $1.6bn narrowing in the net short position to $5.2bn. The shift was primarily driven by short covering alongside a modest rise in longs. However, the overall position remains relatively unbalanced with shorts outnumbering longs 3:1, providing upside risk to CAD.
• The net long AUD position has fallen to its narrowest level since July 2012, with a $2.5bn w/w decline to $0.7bn. The net long AUD position has fallen considerably since the December 2012 high of $10.9bn.
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Scotiabank