Deutsche Bank FX Positioning Update

Profit taking in nascent dollar shorts; euro bought ahead of ECB. Following the
disappointing payroll print investors have taken profit in nascent USD shorts
(note our data was snapped during the ISM non-manufacturing release and
does not fully capture the impact of this event). Ahead of tomorrow’s ECB rate
decision, the euro was net bought but positioning remained close to flat
(figures 7 and 33). Elsewhere, investors are sticking to the popular carry trades,
with NZD longs and SEK shorts the most aggressively extended positions in
G10 (figures 1, 39 and 41). GBP was net purchased over the week as PMI’s
surprised to the topside, most of the demand was from leveraged accounts
whereas asset managers held onto heavy shorts (see figure 35). Yen longs
were modestly trimmed for another week.

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