AUTOREFRESH 
FX speculative positioning: USD shorts on the increase
By Sean Lee || June 14, 2009 at 23:46 GMT
|| 5 comments || Add comment
Another reason to be very careful getting long EUR/USD, cable or AUD/USD at current levels. USD shorts are at their highest level in almost a year, although not yet at extremes. Overall JPY positioning has flipped from long to short and the big unwind in GBP short positions has gained pace. EUR, AUD and CAD longs continue to increase.
In other words, the “carry trades” are back in vogue. This trend has been ongoing for about three weeks so it is not yet getting close to ripe.
Bloomberg just mentioned that both Australia and New Zealand were worried with the run in their currencies also.
The RBA have been quietly selling out of the billions they bought at .6000 last year and I’m sure the RBNZ are following suit, reloading for when they need more ammunition to support.
Hi Sean…gotta watch this one: German Credit Crunch Deepens – UK Telegraph – AEP writes in Today”s Telegraph about German Chamber of Commerce warning that the credit crunch in Germany is getting worse and is “becoming a danger to possible recovery.” The article goes on to say that a DIHK survey of German industry, to be released this week and obtained by Der Spiegel, found that over a third of all large companies are still seeing credit conditions tighten further, if they can borrow at all. Terms are now tougher than they were at the height of the global crisis over the winter.
“Financial conditions are getting worse for important sectors of the economy,” said the report. It found that borrowing costs had risen for most firms even though the European Central Bank has cut its key interest rate to an historic low of 1%…
Thanks Ranger. Yeah, the EUR feels a bit suspect to me but I’m going to sit it out for a little while. I believe that Europe and partic Eastern Europe have still got to deal with a lot of the painful decisions that the US has made over the last 6 months but the timing still does not feel right to be shorting the EUR. As long as the printing presses are turned to full in Washington, the USD is going to look unconvincing and only when they signal an end to this will the USD start making a meaningful recovery. I guess we’re back at the ugly contest again- all currencies look equally bad so it comes down simply to a question of price.
Cheers Sean, I reckon with at least a small surprise announcement/movement from the FED soon, so won´t be overly invested in the EUR…have to go with the flow, though ; )