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Leveraged funds reduced overall net long USD positioning - ANZ

FXStreet (Bali) - Leveraged funds reduced their overall net long USD positioning by USD1.0bn to USD23.5bn in the week ending 30 September, notes ANZ.

Key Quotes

"Leveraged funds reduced their overall net long USD positioning by USD1.0bn to USD23.5bn in the week ending 30 September. We read this as position adjustment ahead of key US economic data (ISM, nonfarm payrolls). The fact that the DXY index rose throughout the week indicates strong USD buying interest despite the modest selling by leveraged funds."

"Commodity currencies saw net selling totalling USD1.7bn, no doubt on the back of weaker commodity prices. Net long AUD positioning was reduced for the fourth consecutive week by USD1.2bn. Leveraged funds ended September holding just 25% of the positions they held at the start of the month. The move lower in AUD/USD mirrored the reduction in positioning. Positioning in NZD is close to square, though there seems to be some reluctance to go net short at this stage."

"EUR positioning continues to rebuild from its early September lows. Leveraged funds still hold an overall net short position worth USD15.1bn, but this is USD2.5bn less than a week ago and USD7.1bn less than at the start of the month. However, the reduction in net short positions likely reflects profit taking rather than a shift in sentiment towards EUR."

"Despite the move higher in USD/JPY during the week towards 110, there were only marginal changes to JPY net positioning. This suggests there is still scope for leveraged funds to further increase their bearish JPY bets and push USD/JPY higher."

"Net long positioning in GBP rose for the second consecutive week following the 18 September Scottish referendum. However, at USD0.5bn, the increase is modest and failed to prevent GBP/USD from falling. The sharp decline in GBP/USD post the CFTC cut-off date suggests a paring back of net long positions have commenced."

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