The following are the key takeaways from the CFTC’s Positioning Report for the week ending June 29th:
For the second session in a row, speculators reduced their net long positions in the euro, showing the lingering implications of the Federal Reserve’s hawkish statement at its meeting in mid-June. Furthermore, following the post-FOMC selloff, increased caution ahead of the Payrolls statistics prompted spot to shift into a consolidative phase.
As the speculative community continued to examine the Fed’s unexpected turn to a more hawkish posture at its June 16 event, net shorts in the dollar fell to YTD lows. DXY price action broke above a brief consolidation zone well above the 92.00 level.
Following the Fed meeting, net shorts in the JPY climbed to YTD highs, which bodes well for the carry trade. As Europe’s vaccine catch-up trade continues apace, net longs in CHF have slumped to 2-week lows.
Following the FOMC meeting and the Bank of England’s extra-cautious warning, net longs in the British pound remained about constant. Just after the cut-off date, Cable started a sharp leg lower from the 1.40 area to the 1.3730 area.
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