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IMM: Renewed momentum on EUR bearish sentiment - Scotia Bank

FXStreet (Bali) - The CFTC report up until Tuesday Nov 4 shows renewed EUR bear sentiment, while continuing to build its USD longs to a net position to a fresh high of $45.7bn, notes the FX Team at Scotia Bank.

Key Quotes

"The market continues to build its bullish USD position, driving the net position to a fresh high of $45.7bn; however the bulk of this is still held against EUR, which at $28.1bn makes up 62% of the total USD position. However all currencies are now held net short against the USD; highlighting a broad USD positive sentiment."

"Market participants seem eager to add risk into their books. Many currencies saw both the gross short and long positions in- crease, which suggests that trading is becoming more active."

"Bearish sentiment toward EUR appears to be gaining renewed momentum, with this week’s $1.7bn widening in the net short the largest w/w build since early August, helping to narrow the dis- tance from the $33.5bn record short from June 2012."

"For JPY, there has been limited change in the $7.9bn net short position. However, this conceals a considerable amount of risk— and near term vulnerability—as gross long and short positions rose $1.5bn and $1.8bn, respectively w/w."

"The deterioration in AUD sentiment has continued—albeit mod- estly—for the 9th consecutive week, providing for a cumulative $7.9bn swing from the $4.5bn long in early September. The shift has been relatively swift and highlights ongoing vulnerability for AUD, a contrast to the $2.5bn swing for CAD over the same period."

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