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The latest CFTC data showed hedge funds adjusting their views on the dollar, our broad USD position calculation shows funds are no longer net short. The % of open interest rose 2.3pp this week to slightly above 0.0%. This remains below the 5-year average, while the positioning z-score stands negative (details below).
If the market is shifting its view due to the recent macroeconomic dynamics, there is a case to be made for further USD upside. If we overlap this view to the positioning data, the dollar is not even close to be capped as the 5-year % of OI top stands at 13.6%
For the yen, hedge funds trimmed their net long exposure. However, the net long position in JPY futures remains at stretched levels. Funds increased their bearish bets on the euro, the % of open interest in the net short is now the largest since mid-August.
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