Flash: Players longer USD than any previous Fed pause - JPMorgan

FXstreet.com (Barcelona) - FX positioning in the midst of what might be an important Fed policy transition has been unusually long USD, says John Normand, FX Strategist at JPMorgan. "Typically Fed easing promotes the build-up of USD shorts which are unwound in anticipation of Fed tightening or after US rates have risen to worthwhile levels" Normand comments.

However, on this stll uncertain cycle, Normand points it looks quite different "in that the EMU crisis has kept investors short euros for most of the past three years, while economic weakness outside the US (China, Australia, Canada) over the past six months has motivated a shift into additional USD longs" the Strategist adds. Normand concludes that CTAs and currency managers are long the USD significantly more aggressive than during any previous Fed pause.