USD net shorts reduced, long gold contracts rose - ANZ

According to the CFTC positioning data for the week ending 5 September 2017, leveraged funds turned net USD buyers for the week ending 5 September, despite weak dollar price action, notes the analysis team at ANZ.

Key Quotes

“Funds reduced their net short USD positions by USD1.4bn to USD6.5bn, the lowest net shorts in three weeks. However, short USD positions could have been rebuilt since then as USD has tumbled further, amid uncertainty over the Fed’s rate hike path, news of approaching Hurricane Irma and continued geopolitical risks over the Korean Peninsula.”

“Dollar buying for the week was broad based except against the CHF. Funds increased their net long CHF position by USD0.1bn to USD1bn on safe-haven demand.”

“All other major currencies saw net selling, led by the pound and the yen. Funds increased their net short GBP and JPY positions by USD0.5bn each to USD3.2bn and USD7.3bn respectively. EUR saw small selling ahead of ECB meeting on 7 September, with funds reducing their net long EUR position by USD0.1bn to USD4.5bn. However, price action post ECB meeting suggests a rebuild of long EUR positions.”

“Commodity currencies were also on the back foot during the week with net selling of USD0.5bn. After net buying for 12 consecutive weeks, AUD saw marginal selling of USD0.02bn to USD6.8bn ahead of Q2 GDP print on 6 September. Meanwhile, long NZD positions were pared for a fifth consecutive week, by a further USD0.3bn to USD0.9bn. CAD also saw a reduction of net longs by USD0.1bn to USD3.7bn, but strong price action after BoC’s rate hike on 6 September points to a re-build of long CAD positions.”

“EM currencies bucked the trend to see net buying to the tune of USD0.5bn. Net MXN and BRL longs were raised by USD0.4bn and USD0.1bn, respectively. Long RUB positions were broadly unchanged at USD0.7bn.”

“Net long gold contracts rose to the highest since September 2016, on safe-haven demand amid geopolitical uncertainty over North Korea.  Meanwhile, net long crude contracts also rose after four weeks of net selling. However, net longs in 10-year USTs fell after two straight weeks of buying even as yields moved lower.”