Scotiabank FX Strategy Research notes that data from the latest IMM report (covering up to Tuesday May 16 & were released Friday May 19) showed widespread changes across the reporting currencies, with positive changes in EUR and GBP and negative changes for CAD.
On the EUR front, ScotiaFX notes that EUR is now the largest held net long, with a $2.2bn w/w build to $5.2bn—a fresh multi-year high.
“Short-covering remains the dominant driver of the recent shift in EUR positioning, with bears nearly halving their gross shorts in the period since mid-April,” ScotiaFX notes.
Short covering has also been dominant in GBP as ScotiaFX notes that short GBP positioning has fallen by roughly two thirds since late March.
On the CAD front, ScotiaFX notes that the CAD net short position has hit a fresh record, widening $0.9bn w/w to $7.2bn—the result of 11 consecutive weeks of deteriorating sentiment.
“Details hint to a continued build in bearish gross shorts and a loss of confidence among the bulls with gross longs falling for a second consecutive week,"ScotiaFX adds.
Source: Scotiabank Research
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