US Dollar (USD) net long positions have decreased. Euro (EUR) net long positions have surged, driven by a decrease in short positions. Pound Sterling (GBP) net long positions have jumped higher again after the recent shake out, and Japanese Yen (JPY) net long positions have increased, Rabobank’s FX strategists Jane Foley and Molly Schwartz note.

FX Market Positioning as at August 20

“USD net long positions have decreased, driven by an increase in short positions. Better US economic data have provided reassurance that the market was priced for too much easing from the Fed during its mini panic earlier this month. That said, Powell struck a slightly more dovish tone than expected at the Jackson Hole event, driving USD lower on Friday. EUR net long positions have surged, driven by a decrease in short positions. Eurozone July CPI inflation registered in line with expectations at 0.0% m/m and 2.6% y/y. We have seen a consistent appreciation of EUR against USD, with EUR/USD up from an August low of 1.0778 to 1.1189 at the time of writing.”