USD longs trimmed, EUR shorts edge lower - Rabobank

According to IMM net speculators’ positioning as at December 11, 2018, USD speculators’ long positions have been trimmed further in the week ending December 11 amid growing market concerns that the Fed could make a policy mistake raising interest rates too quickly at the time when slowdown in the global economy may have negative impact on the US.

Key Quotes

“While EUR net short positions edged lower, more evidence of a slowdown in Eurozone’s economic activity, a warning from ECB President Draghi that the risks “are moving to the downside” and evaporating appetite to implement structural reforms in France accompanied by populist fiscal measures in Italy should prevent the euro from gaining a sustainable upside traction against the US dollar.”

“GBP net short positions increased to the highest level so far in December on the back of rising risk of a hard Brexit.”

“JPY net short positions have been reduced due to rising demand for safe haven driven by market concerns about the global economy. The same logical applies to CHF as speculators reduced their bearish bets on the Swissie.”