Bank of America Global Research uses its proprietary FX flows to assess positions and their changes in Q2, and notes that data suggests that investors missed the USD rally in Q2.
"Despite the strong USD rally, the market position remained flat. Hedge Funds are neutral USD, stretched long in the rest of G10, and short in EM FX. Real Money turned neutral from short USD, reducing longs in the rest of G10, and going short in EM," BofA notes.
G10: Light flows and positions, despite strong price moves
The market ended Q2 long NOK and EUR, short NZD. G10 positioning remained light. Aggregate positioning changes were also very light, especially compared with Q1. Hedge Funds ended Q2 long CHF, EUR, AUD and JPY, and short NZD and CAD, while Real Money remained long EUR, AUD, NOK and short NZD, but turned neutral USD," BofA adds.