EUR/USD, AUD/NZD, GBP flows: Positioning shows little net dollar hedge, Aussie cross stretched (IMM)

Not a lot of action this morning. The fact that news flow on Iran has tended to have more noise than signal of late - alongside the belligerent decoupling of risk from Iran and oil anyway (on its own semiconductor/compute side hustle) - leaves the FX market rather paralysed into a false sense of calm and low volatility.

From the latest IMM data a couple of points in this context stand out. First, the market doesn’t have much in the way of a remaining risk dollar hedge, overall, after the initial squeeze and then erosion. 

There is a bit of cross variation though, with GBP short positioning also context for the lack of election reaction (in the positioning), euro positioning rather flat (back a touch long) and AUD the stand out long, for all the understandable reasons with the commodity breakout and the AI investment price action. In aggregate, there is still that sense that the ‘pain trade’ for the short-term market is another unloved dollar bounce, especially versus the euro.  

On the AUD front, it is worth noting that for all the logic amid commodity index upside, AUD/NZD relative cross positioning is clearly very extreme at present. So this is one trade that  from a s/t speculative standpoint might also be at possible risk of a shakeout - on one leg or the other.