22 August 2016 at 8:08 GMT
- Funds buy EUR, JPY, sell GBP in week ending August 19
- Short-covering continues in EUR but faces upside resistance
- Jackson Hole central bank speculation fuels positioning
The wild west: hedge funds and money managers are jockeying for position ahead of the central bank summit in Jackson Hole, Wyoming. Photo: iStock
By Ole Hansen
Hedge funds and large money managers maintained but reduced bullish dollar bets for a third week. Just like the previous week, it was EUR and JPY buying and the continued selling of GBP to a new record short that attracted most of the attention.
Gross positions were generally increased with longs increased in all but one, while five out of eight short positions were also increased. Traders returning from holiday and increased speculation ahead of the Jackson Hole central bank summit could be some of the reasons behind this pick-up in positioning.
Short-covering in EUR continues but still only at a leisurely pace. This reluctance to get involved could signal that traders do not see much further EURUSD upside above €1.14 at this stage.
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— Edited by Michael McKenna
Ole Hansen is head of commodity strategy at Saxo Bank