According to BNY's Geoff Yu, recent IMM (International Monetary Market) data shows that commodity-linked currencies such as the Australian Dollar (AUD), New Zealand Dollar (NZD), and Norwegian Krone (NOK) have experienced the largest positioning adjustments, with these currencies being the most actively traded in recent sessions. NOK and the Canadian Dollar (CAD) are seeing notable outflows, which BNY attributes to their high sensitivity to oil prices and modest expectations for further tightening by the Norges Bank. The prospect of a durable ceasefire is also cited as a factor leading to a derating of these currencies, with NOK identified as the most overheld G10 currency at present [1].
In contrast, the NZD and AUD have underperformed since early May, a trend linked to rising input costs and weak Chinese growth, both of which have undermined the case for improved terms of trade. BNY notes that while changes in U.S. rate expectations relative to the antipodean currencies have historically had a significant impact on valuations, current IMM positioning suggests much of this adjustment has already taken place [1].
Looking ahead, BNY expresses a view that non-energy commodity currencies could outperform in the near term, but the prevailing risk-reward environment favors relative-value trades as long as U.S. Dollar strength persists. The report also highlights that the Euro (EUR) has moved back into overheld territory due to strong net inflows and high trading volumes, while Dollar net flows remain broadly neutral, indicating its dual role as both a funding and carry vehicle in current market conditions [1].
CONCLUSION
IMM data reveals significant shifts in commodity currency positioning, with oil-sensitive NOK and CAD facing outflows and AUD and NZD underperforming due to external pressures. BNY suggests that while non-energy commodity currencies may have near-term upside, the current environment favors relative-value trades amid ongoing Dollar strength.