US Dollar Longs Slashed, GBP/USD Shorts Reduced Sharply, CAD Reversal Persists - COT Report
COT Report – Analysis and Talking Points
Source: CFTC, DailyFX (Covers up to December 17th, released December 20th)
In the week up to December 17th, CFTC data highlighted that speculators cutback on their bullish bets in the US Dollar by $2.78bln against G10 currencies to $18.7bln. Consequently, long positioning in the greenback is at the lowest since mid-November.
The pullback in USD longs had largely stemmed from positioning changes in GBP, NZD and CHF, which all saw net shorts slashed by over $1bln. Following the UK election, bearish bets in the Pound have been cut to a 7-month low as investors continue to take up fresh longs with overall positioning now flat. Elsewhere, the sharp unwind in NZD net shorts persists amid a balanced RBNZ rate outlook, which in turn has left positioning in the currency relatively neutral. Swiss Franc net shorts saw a notable reduction; however, investors continue to hold a sizeable bearish bet in the currency.
Given that the domestic outlook continues to weigh on the Australian Dollar, sentiment remains weak with investors boosting their net shorts in the currency amid a liquidation in gross longs. Elsewhere, CAD bulls continue to reverse course with overall longs cut by $717mln to $851mln.
--- Written by Justin McQueen, Market Analyst
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