USD longs increased modestly, GBP bearish bets surged - Rabobank

According to IMM net speculators’ positioning as at July 23, 2019, net long USD positions increased modestly in the week ending July 23 reflecting strong performance of greenback, which appreciated against all its G10 peers in July, especially against sterling, notes the analysis team at Rabobank.

Key Quotes

“Bearish sentiment towards the euro intensified ahead of the ECB’s meeting. While the ECB refrained from adjusting its monetary policy last week, President Draghi set the stage for easing in September confirming our expectations for a 10bps deposit rate cut.”

“Bearish bets against GBP set another year-to-date high on the back of growing market concerns that the UK could be heading for a hard Brexit under the leadership of newly elected PM Johnson.”

“Geopolitical tensions in the Persian Gulf did not increase sufficiently to trigger a major shift in market positioning in JPY and CHF. Bullish bets on CAD increased further, while speculators trimmed their bearish wagers against AUD.”