Net long positions in the US dollar (USD) rose slightly for the first time in 4 weeks. Net long positions in the euro (EUR) fell again after rising in the previous week. Net long positions in the pound sterling (GBP) fell for the third week in a row and net long positions in the Japanese yen (JPY) returned to positive levels for the first time since 2021, note Jane Foley, Senior FX Strategist, and Molly Schwartz, Cross-Asset Macro Strategist at Rabobank.
JPY hits positive territory for the first time since 2021
“Net long USD positions rose slightly for the first time in four weeks, reflecting an increase in long positions. Better US economic data confirmed that the market had priced in too much Fed easing during the mini-panic earlier this month. The market now awaits Fed Chair Powell’s appearance at the Jackson Hole event on Friday.”
“Net long positions in the euro fell back after last week’s rise. The market remains focused on policy signals from the ECB, but the single currency has largely shrugged off fiscal pressures in several eurozone countries this year. ECB chief economist Lane is scheduled to speak in Jackson Hole on Saturday.”
“Net long GBP positions have fallen for the third week in a row, reflecting a decline in long positions as the market reassesses the post-UK election rally. However, GBP is still the only G10 currency to have outperformed the USD year to date. Net JPY positions have turned positive for the first time since 2021, reflecting a rise in long positions, continuing the uptrend that has been in place since early July.”
