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Commodity currencies under pressure last week - ANZ

FXStreet (Łódź) - ANZ Strategists, Irene Cheung and HuiYing Chan look at the main developments on currency markets last week.


Key Quotes


"Leveraged funds increased their overall net long USD positioning by USD4.1bn to USD27.5bn in the week ending 7 October. We read this as position adjustment ahead of the FOMC minutes released on 9 October 2014."

"While comments released from the FOMC minutes have since disappointed, DXY has continued to rise largely on risk off sentiments on worries over global growth. This suggests that further increases in USD positioning are likely to have occurred since the CFTC cut-off date."

"Commodity currencies continued to take a hit, seeing net selling totalling USD1.9bn after USD1.7bn last week. On the specific commodity currencies, it is worth noting that positioning in AUD turned to net short USD0.4bn from previous net long USD1.1bn."

"This is the fifth consecutive week in which a reduction of net long positioning in AUD has been registered. Since then, cumulatively, we have seen USD5.0bn worth of net long positioning in AUD being taken out. On the other hand, positioning in NZD is now square at USD0.0bn after a reduction of USD0.1bn in net long positioning."

"As Eurozone data continued to disappoint, there was net selling in EUR and GBP. Net short positioning in EUR increased by USD1.5bn to USD16.6bn while net long positioning in GBP declined by USD0.8bn to USD4.3bn. Overall net short positioning in EUR, while stretched, is still at a considerable distance from its highest point at USD22.2bn on 2 September, suggesting further room for increases in net short positioning."

"GBP, on the other hand has now been plagued by Eurozone concerns. Recent downward surprise in data appears to have increased further selling on the GBP post the CFTC cut-off date."

"While selling occurred in other non USD majors, JPY bucked the trend this week as USDJPY retraced from its highs at 110. Net short positioning reduced marginally by USD0.3bn to USD10.3bn."

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