Leveraged funds reduced their net short positions against the USD for the second week. Net short positions against the USD fell by USD0.4bn, largely reflecting the reduction in positioning in the EUR.
EUR net positioning turned short for the first time since late July 2013. Net positioning in EUR fell from 10.7k to -1.7k, a reduction of 12.4K (USD 2.2bn). Since the ECB meeting on May 8, when ECB President Draghi indicated that the Governing Council is ready to act at the June meeting, leveraged funds have unwound their net long EUR positions, putting downward pressure on EUR/USD. With positioning now short, the ECB needs to deliver at their June meeting or risk a short squeeze in the euro.
AUD net long positions rose the second consecutive week. Net long positioning increased by 1.9k contracts (USD0.1bn) to 31.9k contracts, though this was not enough to prevent AUD/USD from falling.
There was an increment in net positioning for GBP after three consecutive weeks of reduction. Leveraged funds increased net positioning in GBP by 3.9k contracts (USD0.4bn) to 113.3k.
