US Dollar Bulls Face Uphill Battle Amid Shift in Yen Positioning
Futures traders continued to cut their net-long exposure to the US dollar last week, reaching a new 14-week low of $18.1 billion. Despite this decline, large speculators remain net long on the greenback.
The bigger shift came in Japanese yen positioning, where large speculators finally flipped to net long for the first time since February. This change was driven by renewed bets for a hawkish Bank of Japan and intervention from the Ministry of Finance. However, asset managers are yet to join them, with net-short exposure of 570 contracts.
The Canadian dollar rally has failed to break through fresh highs in four weeks, despite expectations for another 25-basis-point hike from the Bank of Canada. Futures traders remain net short on the Canadian dollar, but have reduced their bearish exposure by cutting net-short positions.