The US Dollar (USD) and the Pound Sterling (GBP) gain momentum while the Euro (EUR) and the Japanese Yen (JPY) lose track, strategists at Rabobank note.
US shows the best performance in the FX
“USD net long positions have increased for five consecutive weeks, driven by a decrease in short positions. Labor data came in hot this week with higher-than-expected nonfarm payrolls registering 272 thousand new jobs added to the US economy in May. Investors had priced in a slim-to-none likelihood of a June rate cut going into the June 12th FOMC meeting.”
“EUR net long positions have decreased, driven by an increase in short positions. The ECB released its decision to cut rates 25bps at the June 6th meeting. The market is positioned for a rate pause in July. GBP net long positions increased for the third consecutive week, driven by an increase in long positions. Investors are positioned for a no-change decision from the Bank of England at the June 20th meeting.”
“JPY net short positions have increased, driven by decrease in long positions. PPI registered higher than expected at 0.7% m/m for May versus expectations of 0.5% m/m. Investors were positioned for a no-change decision from the BoJ going into the June 14th meeting.”
