US Dollar (USD) net long positions have fallen further after the previous week’s plunge. Euro (EUR) net long positions have moved higher, driven by an increase in long positions. Pound Sterling (GBP_ net long positions have regained some ground, driven by a jump in long positions, and Japanese Yen (JPY) net long positions have increased for the sixth consecutive week to their highest level since 2016, driven by an increase in long positions, Rabobank’s FX analysts Jane Foley and Molly Schwartz note.

USD net longs fall, EUR, GBP and JPY net longs grow

“USD net long positions have fallen further after the previous week’s plunge. Net longs are now at their lowest level since April following the decision by the Fed to cut rates by 50 bps at September’s FOMC meeting. Further rate cuts are expected before the end of the year, with another 50 bp move being touted by some commentators.”

“EUR net long positions have moved higher, driven by an increase in long positions. That said, in recent sessions speculation has increased that the ECB could bring forward expected rate cuts on the back of weak PMI data in Germany and France and softening inflation data in various Eurozone countries.”

“GBP net long positions have regained some ground, driven by a jump in long positions. GBP remains the best performing G10 currency in the year-to-date. JPY net long positions have increased for the sixth consecutive week to their highest level since 2016, driven by an increase in long positions. The JPY suffered further volatility on the back of the LDP leadership election and rallied with the announcement that Ishiba had won.”