CAD – Société Generale shorts stand out

The main FX positioning story was the relaunch of a massive carry trade and associated yen shorts, note strategists at Société Generale FX.

CAD brief coverage seems far from over

“As we suspected on August 7th, these shorts were all but wiped out, while CFTC reports released since then show that yen positions have fully normalized. Now the largest currency position is in CAD as a very significant short accumulated between March and July.”

“The reversal of this position has started this month and has already pressured USD/CAD below 1.35 from 1.40. But given the size of the remaining short, CAD short coverage looks far from over.”