As suggested in the CFTC Commitments of Traders report in the week ended September 8, NET SHORT for USD Index futures dropped – 988 to 5 758 contracts. Speculative long positions slipped -895 contracts and short positions fell -1 883 contracts. Concerning European currencies, NET LENGTH in EUR futures added +67 contracts, to 196 814. As expected, ECB revealed that the members had discussion about euro’s strength at the September meeting and pledged to monitor the development. However, no concrete action has been announced. Meanwhile, upgrades of inflation forecasts for 2022 and 2023 signal that euro’s appreciation is not yet a concern for inflation. GBP futures’ NET LENGTH rose 6 418 contracted to 6 418 for the week. Sterling slumped last week losing -2.5% against US dollar and falling to the lowest in 5.5 months against the euro. Concerns over no-deal Brexit have soared as the deadline of trade deal negotiation approaches. Moreover, the “internal market bill” proposed by Boris Johnson’s administration has drawn strong criticism from EU, raising uncertainty of the EU-UK trade relations after the transition period which is expected to end by December 31, 2020. BOE meeting next week will be closely watched as policymakers are expected to signal to add more stimulus measures in November.
On safe-haven currencies, NET LENGTH on CHF futures dropped -70 contracts to 11 527. NET LENGTH on JPY futures fell -7 862 contracts to 21 742. Concerning commodity currencies, AUD futures’ NET SHORT gained +1 879 to 2 044 contracts. Separately, NZD futures’ NET LENGTH declined -2 066 to 4 900 during the week. Meanwhile, NET SHORT for CAD futures plunged -9 651 contracts to 17 355 contracts.