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Leveraged funds decreased overall net long USD - ANZ

FXStreet (Bali) - ANZ reviews the FX futures positioning data for the week ending 21 October 2014, noting that leveraged funds decreased their overall net long USD positioning by USD1.0bn to USD32.1bn.

Key Quotes

"Leveraged funds decreased their overall net long USD positioning by USD1.0bn to USD32.1bn after registering a record high the previous week in the week ending 21 October. This came on the back of conflicting comments by Fed officials on the pace of rate hikes as well as weaker-than-expected retail sales in the US. The flash crash in the US bond market on 15 October will have also had an impact on positioning."

"The reduction in USD positioning was driven by the JPY, which benefitted from rising risk aversion. Net short positioning in JPY reduced by USD3.5bn to USD6.0bn."

"Overall, GBP led the way in net selling as its 5-year low inflation of 1.2% yoy cast doubts on the BOE hiking rates soon. Net long positions in GBP declined by USD1.1bn to USD2.4bn. Notably, it is the only currency that is registering a net long positioning. Hence, there is the likelihood of further net selling in GBP should global risk aversion fears intensify, or there are further doubts on the BOE hiking cycling."

"Commodity currencies saw net selling for the 7th consecutive week. Net short positioning in commodity currencies increased by USD0.5bn to reach USD4.2bn. While net selling was still observed, the pace appeared to have slowed. In particular, with AUD, positioning was unchanged after experiencing average net selling of USD1.0bn for the prior 6 weeks. This was likely due to China’s Q3 GDP coming in better than expected, helping to allay growth fears."

"Net selling in EUR paled in comparison to the other currencies this week, with net short positioning increasing by USD0.3bn to USD 19.3bn. Overall net short positioning in EUR, while stretched, is still some way off its high of USD25bn recorded in June 2012, suggesting further room for increases in net short positioning."

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