Hedge Funds Amass Biggest New Zealand Dollar Net Short Since 2006

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Or sign-in if you have an account.dz2wf11y)w25u7n54(okcdmf_media_dl_1.png Commodity Futures Trading Commis(Bloomberg) — Leveraged funds have taken their short positions on the New Zealand dollar to a record high, betting that a recent rebound in global oil prices may exacerbate domestic economic pressures.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountLeveraged funds’ 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. While asset managers trimmed their net short positioning, they remained near the most bearish on the currency since December, the data show.The bearish positioning contrasts with a recent rally in the currency, which has been driven by a hawkish Reserve Bank of New Zealand. The bets also reflect anxiety among some investors over New Zealand’s energy-importing economy after escalating tensions between the US and Iran pushed crude prices back above $90 a barrel. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe oil shock threatens to further worsen the country’s trade balance, which narrowly avoided a deficit last month, while domestic consumer spending slipped.“New Zealand’s economy seems to have been flat in 2Q, and the recent return of higher oil prices is another macro headwind,” said Andrew Ticehurst, a senior rates strategist at Nomura in Sydney, noting downside for the currency. It “amounts to a negative terms-of-trade shock, given New Zealand is totally reliant on oil imports,” he said.The short positioning is surprising, however, as it was anticipated some bearish bets would have been covered following the confirmation that the RBNZ’s hiking cycle is underway, Ticehurst said.The kiwi edged up to 58.54 US cents on Monday, strengthening about 3% since the RBNZ’s hawkish policy decision on July 8. The currency has gained versus all its Group-of-10 peers over the period.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.