Net speculative long positions in the euro increased sharply to 59,425 contracts from 13,090, indicating a bullish sentiment likely influenced by positive eurozone data and central bank expectations.
Bullish positions in the yen decreased slightly, with net longs falling to 122,964 contracts from 133,902. Speculative longs on the pound remained stable at 29,402 contracts, compared to 29,193 the previous week, reflecting cautious optimism regarding UK macro conditions.
Australian Dollar Short Positions Expand
Net shorts on the Aussie dollar widened significantly to 70,449 contracts from 48,226, possibly driven by concerns over China’s outlook. Net shorts on the Swiss franc decreased slightly to 34,375 contracts from 36,957, suggesting a continued bearish stance.
Speculative shorts in the kiwi dollar reduced to 40,444 contracts from 52,931, indicating a slight uptick in sentiment. Net shorts on the Canadian dollar also eased to 136,582 contracts from 142,410, potentially linked to improving oil prices or shifts in Bank of Canada policy views.
We have observed a sharp rise in net long positions in the euro, suggesting traders are leaning towards a more positive market outlook. This shift appears to be driven by stronger eurozone data and expectations surrounding monetary policy. A move of this magnitude in positioning indicates that many participants anticipate further gains, likely prompted by stabilising economic indicators and central bank sentiment. That being said, an overly crowded bullish stance often leaves room for sudden reversals, particularly if upcoming data fails to meet expectations or if policymakers adopt a more cautious tone.
In contrast, positioning in the yen has softened slightly. While the overall bullish sentiment remains intact, the reduction in net long positions indicates that some traders are re-evaluating their stance. This adjustment could stem from shifting perceptions about central bank policy or changing global risk appetite. If external conditions change abruptly, particularly regarding US yields or broader risk sentiment, the yen’s recent positioning shift might continue.
Swiss Franc And Canadian Dollar Sentiment
There has been little movement in speculative pound positions, reflecting a market that remains measured in its outlook. Traders have neither added significantly to their bullish stance nor moved towards pessimism, indicating a wait-and-see approach. With UK macroeconomic conditions in focus, upcoming data releases and policy signals could play a decisive role in determining whether this cautious stance holds or shifts more decisively in one direction.
The Australian dollar has seen a substantial increase in speculative short positions, a development that aligns with ongoing concerns over China’s economic momentum. With Australia’s export-driven economy closely linked to Chinese demand, traders appear to be wary of potential declines in trade activity or commodity-related weakness. If upcoming economic releases from China reinforce these concerns, there could be further positioning adjustments in the sessions ahead.
In the Swiss franc, a modest trimming of net short positions suggests that the longstanding bearish sentiment remains, though with slightly less conviction. While positioning still leans towards expectations of franc depreciation, marginal adjustments suggest that some participants may be reassessing risk-reward dynamics. Any shifts in global risk sentiment or central bank communication might provide further cues on whether this trend will persist.
The New Zealand dollar has seen a reduction in speculative shorts, pointing to a slight improvement in sentiment. While positioning remains net negative, the scale of short-covering suggests some traders are becoming less certain about further downside. Similarly, in the Canadian dollar, net shorts have eased, possibly due to improving oil prices or adjustments in monetary policy expectations. Both currencies could see further shifts if commodity markets continue their recent trends or if central banks offer any remarks that alter rate path expectations.
With positioning adjustments unfolding across multiple currencies, traders should pay close attention to upcoming data releases, commodity price movements, and central bank speeches. The market has taken on clearer directional bets in certain areas, yet shifts remain possible if incoming information challenges prevailing expectations.
