07 July, AtoZForex.com, Limassol — Bank of Nova Scotia, the third biggest bank in Canada commonly referred as Scotiabank, has provided this week’s COT report. Released on Monday, July 6th, Scotiabank's COT report includes data collected up to the 30th of June for the main majors.
USD/EUR and JPY proportions
Since Scotiabank collected the information before the current major Greek drama, the Japanese Yen was shorted. However, as it is a safe haven asset, when drama hit it appreciated against its counterparts dramatically. Thus, with Greek crisis continuing is likely that JPY will enhance further.
Nevertheless, the following are the Bank’s comments on a few of the majors: “Bullish USD sentiment has softened modestly, the aggregate USD long position falling back to the lower end of its range since mid-May. Investors are bearish all currencies with the exception of CHF, and short positions in EUR and JPY represent over 80% of the aggregate $27.4bn USD long.”
Moving closer to the escalating Greek drama Scotiabank acknowledged a shift in sentiment for the Yen: “JPY remains extremely vulnerable to violent swings in sentiment as we consider the sizeable range from mid-May—the net short position shifting between $2.3bn and $11.7bn. Short covering appears to have slowed, and JPY gross longs have exhibited considerable volatility over the past three weeks.”
Scotiabank’s strategists indicate a slowdown of bullish sterling run: “Bearish GBP sentiment has softened considerably over the past three weeks, its net short position more than halving to $1.3bn. The multi-month period of short covering in EUR appears to be slowing, as we note a stabilization in the net short EUR position over the past three weeks.”
Pessimistic AUD and CAD
“Negative sentiment toward CAD and AUD has deteriorated further, the short CAD position widening $0.5bn to $1.9bn—a level last seen in late April. CAD sentiment has deteriorated in four of the past five weeks, driven primarily by a renewed build in gross shorts,” pointed out by Scotiabank’s strategists.