Data in this report cover up to Tuesday Dec 15 & were released Friday Dec 18.

• Investors lightened up their USD exposure into Wednesday’s Fed, pressuring the aggregate USD long position with a remarkable $9.3bn w/w drop. Investors pared shorts in all currencies with the exception of NZD and CAD, with deterioration in the latter allowing it to become the second largest held net short after EUR. JPY and CHF had the largest w/w swings, the latter’s incorporating the Dec 10 SNB decision. CHF is now held net long.
• CAD sentiment continues to deteriorate as investors position for further decline, with gross shorts building in five of the last six weeks. The net short $3.7bn position is relatively modest, leaving it with ample scope to reach and exceed the $5.1bn level observed in late summer. AUD sentiment continues to improve, narrowing an impressive $4.0bn over the past four weeks. The details also hint to confidence as we note that four weeks of short covering have been compounded by this week’s sizeable build in longs.
• EUR sentiment has improved for a second consecutive week, the net impact of short covering somewhat restrained by this week’s drop in longs. We highlight EUR’s ongoing vulnerability to positioning adjustment given the sizeable $21.9bn net short.
• Short covering in JPY has accelerated, the net short narrowing an impressive $4.2bn to $2.7bn
Regards All Users.
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