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Kiwi a standout in shifting speculator attitudes

The latest positioning reports from the US Commodity Futures Trading Commission has highlighted some interesting trends.

Among currencies, a standout is a shift in speculators’ attitudes towards the New Zealand dollar.

Traders are now net short the Kiwi by 14,724 contracts, the most bearish stance since mid-2015.

The trend reflects weakness for both the New Zealand and Australian dollars versus the buck as the Federal Reserve is seen raising interest rates a few more times this year.

The Kiwi and Aussie — which tend to sport a fairly tight correlation to global market risk appetite — have also struggled in the face of a more tentative mood among investors of late.

Traders may like to note that the previous biggest net short was nearly 20,000 contracts in July 2015, and it came just several weeks before the Kiwi hit a cyclical low from which it started on a year-long uptrend.

Meanwhile, the sugar trade has been turning sour.

Hedge funds have trimmed bets on higher raw sugar prices for six weeks in a row as supplies of the commodity remain ample and investors sense continuing pressure on demand amid a trend for healthier eating and drinking in many developed economies.

Last week the ICE raw sugar contract fell to an 11-month low of 16.05 cents a pound as traders slashed their net long futures position to just 104,479. That is half the level of just two months ago and the weakest bullish sugar bet since August.

jamie.chisholm@ft.com