Analysts at ING think that the encouraging news flow on the U.S.-China trade relations front has not yet left its mark on AUD and NZD positioning, with the two currencies still the biggest speculative shorts in the G10 space.

• “The kiwi dollar even saw a marginal increase in net shorts, that now pile up to -56% of open interest.
• The NZD outperformance in the past few days, mostly triggered by a significant re-pricing in Reserve Bank of New Zealand rate expectations (OIS implied probability of a November cut is now only 50%, from 100% two weeks ago), has likely been aided by some position-squaring effect. In turn, we would expect to start seeing some correction in the NZD positioning gauge in the next CFTC report.
• This week’s Reserve Bank of Australia policy announcement may be pivotal for both antipodean currencies: should it turn out to be a positive catalyst for the currencies, their extensive net short positioning suggests good potential for short-term rallies.”