📝Real Money Not Unwinding USD/JPY Longs As Spot Comes Off Highs: UBS Strategy

USD is under pressure again, seemingly on little news flow. The desk has seen a number of real money clients unwinding long USD positions, notably against the likes of MXN KRW, and in the G10 space, CHF but interestingly still not JPY, even though spot has come off the highs.

It is worth noting that the hedge fund community have been unwinding topside structures in USDJPY though not yet outright flipping direction preference. The EUR is stuck between the proverbial rock and hard place, PMIs were disappointing but USD is selling-off, so despite a swathe of EUR sellers both on Wednesday and Thursday it is struggling to break meaningfully (and remain) below 1.0500 in spot. Finally, a build in interest in EURCHF downside plays could be adding to CHF buying pressure and is definitely one to watch, particularly with parity only 60/70 pips away. - UBS Strategy