FX Weekly Positioning by Lloyds TSB

1/ EUR long positions now lowest since Sep 28 as Ireland crisis reaches climax, biggest 2wk drop since Jun; 3mth RR rebound from 2mth low and with investors still not ‘net short’, buying interest on dips likely to emerge on relief trades in risk 1/ EUR long positions now lowest since Sep 28 as Ireland crisis reaches climax, biggest 2wk drop since Jun; 3mth RR rebound from 2mth low and with investors still not ‘net short’, buying interest on dips likely to emerge on relief trades in risk

2/ GBP long contracts up for 3rd straight week, positioning now longest since Mar-08; net positioning is now stretched (88.9% percentile) and indicates greater risk of pullback in spot

3/ AUD long positions reduced for 6th successive week, lowest since July 27; risk of counter-trend move recedes based on lower percentile rank (85.8%); 3mth RR recover but stall at -2.50 so hint at greater investor reluctance to bid for AUD calls in response to commodities, China

4/short USD vs JPY and CHF lowest since July; positioning as a result has become less stretched but further normalisation may depend on direction of US yields

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