JPY – front foot again – Rabobank

Net long US dollar (USD) positions fell further after the previous week’s decline. Net long positions in the euro (EUR) moved higher, driven by an increase in long positions. Sterling (GBP_ net long positions regained some ground, led by a jump in long positions, and Japanese yen (JPY) net long positions rose for a sixth straight week to their highest level since 2016, led by a rise in of long positions, notes Rabobank FX analysts Jane Foley and Molly Schwartz.

USD net longs decrease, EUR, GBP and JPY net longs increase

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

“Euro net long positions edged higher, driven by an increase in long positions. That said, speculation has grown in recent sessions that the ECB could push ahead with expected rate cuts amid weak PMI data from Germany and France and softening inflation data in various eurozone countries.

“GBP net longs have regained some ground, driven by a jump in long positions. GBP remains the best performing G10 currency to date. JPY net long positions rose for the sixth consecutive week to the highest level since 2016, driven by an increase in long positions. JPY experienced further volatility following the LDP leadership election and rallied on the announcement that Ishiba had won.”