Article / 17 March 2014 at 8:19 GMT

COT: Strong EUR buying at the expense of JPY

Head of Commodity Strategy / Saxo Bank

• Hedge funds continue to cut dollar exposure
• EUR net position rises to highest since October
• EURJPY also rises after ECB meeting

By Ole Hansen

Hedge funds continued to reduce their exposure to the dollar during the week of March 11. Six out of eight IMM currency futures were net bought against the greenback, not least the EUR which saw its net-long position rise to the highest since last October. Selling of JPY resumed which pointed towards some activity in the EURJPY currency pair.

Speculative positioning in IMM currency futures

The EUR net-long jumped following the March 6 European Central Bank meeting which started a move that took the EURUSD to the highest level in more than two years.

Speculative positioning in EUR

Some of the EUR buying occured against the JPY where the net-short rose to a January 21 high. This left the EURJPY exposed to some long-liquidation considering the amount of fresh longs that had gone into this cross within a short space of time. 

Speculative positioning in JPY

Ole Hansen is head of Commodity Strategy at Saxo Bank. To keep track of Ole's commentary, go to our online social trading platform.

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