US Dollar (USD) net short positions have increased. Euro (EUR) net long positions have halved. GBP net long positions have decreased for the second week in a row, and JPY net long positions have decreased for three consecutive weeks, Rabobank’s FX analysts Jane Foley and Molly Schwartz note.

Longs decrease, shorts increase

“USD net short positions have increased, driven by an increase in short positions. US CPI inflation printed on October 10th, and registered higher than expected in both the headline and core measures, destroying investor hopes of a 50bps cut at the next meeting. On the spot market the USD is the best performing G10 currency in the month to date.”

“EUR net long positions have halved, driven by an increase in short positions. EUR/USD reached its lowest levels since August on October 17th, trading at lows of 1.0811. Greenback strength in the spot market has dominated in October and the EUR has slipped to the position of fourth strongest performing G10 currency month-to-date.”

“GBP net long positions have decreased for the second week in a row, driven by a decrease in long positions. GBP is still the best performing G10 currency year-to-date. The BoE is expected to cut rates by 25 bps in November, but it is still far from certain if the MPC can pick up the pace of rate cuts. JPY net long positions have decreased for three consecutive weeks, driven by an increase in short positions. The market is pricing in a no-change decision for the October 31st.”