A quiet week for sentiment, given that Tuesday’s position datefails to incorporate much of the event risk that followed. The pullback in all of the long positions underscores this anticipation. Overall, the broad themes remain unchanged as investors are bullishGBP, EUR, CHF, AUD and NZD, while sentiment toward CADcontinues its recent trend of improvement but remains bearish.
Sentiment toward commodity currencies CAD, AUD and NZD isgenerally improving, as positioning moves toward the upper endof its one-year range (see bottom right p2). The improvement forCAD — now held net short $2.8bn, from its near-record short$6.3bn position in mid-March — is an important turn.
European currencies are most favored (see bottom left p2), withGBP and CHF just shy of the upper end of their one year range.However, this week’s action was muted with only a minor $0.4bnpull back in GBP—the largest held net long at $4.7bn.
JPY sentiment deteriorated w/w, widening $0.4bn to $8.6bn.JPY remains the largest held net short, however it has made a considerablepullback from extended bearish levels observed in late2013.
Read the full report: FX Research
Scotiabank