Growing concerns about Spain and mixed economic data are pushing investors out of riskier currencies.
So it's not really surprising that the latest Commitments of Traders report shows investors are pulling in their horns.
The net long dollar position reached $20 billion in the week ended April 12, in line with the largest net long dollar positions over the last several years, says Camilla Sutton, chief currency strategist at Scotia Capital. "When the USD position was previously at these levels it was generally on the back of the EUR position, however this time it is more broad based with large short positions in EUR and JPY, as well as growing short positions in GBP," she wrote in a note to clients.
At the same time, investors are cutting their net long positions in the Australian and Canadian dollars - and building short euro positions, the report shows.
The increasing euro shorts jibe with Sutton's generally bearish view on the euro - but she is not expecting a precipitous drop. Rather, she says, she is looking for "a slow trend lower to 1.25 by year?end."
Then again, if Spanish bond yields over six percent are any indication, there are some out there who are a little more nervous.
Be careful out there.
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