💱New Zealand Dollar/US Dollar FX Spot Rate
NZDUSD
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Hedge funds amass record net short NZD positions due to oil price shock and terms-of-trade concerns, despite hawkish RBNZ.
Impact on assets 1
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Leveraged funds have taken their short positions on the New Zealand dollar to a record high. Net short positioning in the kiwi increased by 1,907 contracts to 29,582 contracts in the week to July 14, a record in Commodity Futures Trading Commission data going back to 2006. The bearish positioning contrasts with a recent rally in the currency driven by a hawkish Reserve Bank of New Zealand, and reflects anxiety over New Zealand's energy-importing economy after escalating tensions between the US and Iran pushed crude prices back above $90 a barrel. Andrew Ticehurst, a senior rates strategist at Nomura in Sydney, noted that the return of higher oil prices is another macro headwind and amounts to a negative terms-of-trade shock given New Zealand's total reliance on oil imports. The kiwi edged up to 58.54 US cents on Monday, strengthening about 3% since the Reserve Bank of New Zealand's hawkish policy decision on July 8.
Hedge funds amass record net short NZD positions due to oil price shock and terms-of-trade concerns, despite hawkish RBNZ.