FXStreet (Barcelona) – Strategists at BofA-Merrill Lynch, offer their proprietary FX positioning data, noting that the data prints a positive picture for USD, JPY and shows that SEK remains vulnerable.
Key Quotes
“Our proprietary flows show the official sector supporting the USD, while investors stay on the sidelines waiting for resolution in Greece. Officials bought the USD during the last four weeks, particularly against EUR and GBP. Our official clients were mostly sellers of the USD earlier this year, suggesting room to buy. Our positioning analysis also suggests that hedge funds are now long EUR for the year and could re-establish short positions after the Greek referendum.”
“Our proprietary flows are also positive for JPY. Hedge funds have been buying JPY in five of the last six weeks, while real money has been buying JPY in the last four weeks. These flows could explain why JPY was the only G10 currency that appreciated against the USD last week. Reduction in risk appetite from risks in Greece could boost further demand for JPY in the weeks ahead.”
“Riksbank’s easing last week surprised markets and squeezed investors from long SEK positions. Our proprietary flows suggest that hedge funds have been buyers of SEK for most of the year and that the positioning squeeze has more to go.”
(Market News Provided by FXstreet)