TRADERS INCREASE LONG USD EXPOSURE
• The net USD position rose to $34bn (a large week‐over‐week increase of $9.3bn). This represents the largest net long position in a year and highlights a notably bullish environment for the USD.
• The net short EUR position widened to $13.1bn, making it the largest short held against the USD, surpassing even JPY. Even as traders were building shorts, spot was reasonably stable, trading between
1.2797 and 1.3029 during the same week (Tuesday to Tuesday). This suggest that there are also large EUR positive flows that are succeeding in offseting the change in sentiment.
• The net short CAD position, narrowed to $3.3bn as shorts continued to cover or potentially shift exposure towards AUD. The net short AUD position widened dramatically and now for the first time in months sits equivalent to the CAD net short at $3.2bn.
• The net short JPY position was relatively stable at $11.7bn. The EUR short position has now surpassed it. Likely reflecting traders allocating new positions towards currencies who have not undergone large downside moves already.
• MXN and NZD stand out as the only net longs held against the USD; with the MXN position at $5.5bn it is particularly vulnerable to a turn in sentiment.
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Scotiabank