Citi: FX Positioning Indicator: Crowded Short CAD
- Active currency managers increased their short positioning in CAD further this past week. The Positioning Indicator value is now at three, indicating short CAD at 3x normal exposure. The managers have clearly benefited from the recent USDCAD gains as they have been mostly long this pair since June, but this latest positioning level has rarely been reached in our 3-year historical series and could potentially be crowded.
- There was selling elsewhere in the G10 commodity currencies. Active traders are now neutral NOK, which is the first time since the beginning of the year that they haven’t had a relatively large long krone position. There was also an increase in short AUD positioning as well as a reduction in long NZD.
- Managers continue to remain long USD above their normal exposure level with net dollar buying over the past week.