State of the Forex market: USD and AUD see increased demand, CAD and NZD fall short

Investing.com -- The demand for the United States Dollar (USD) experienced a significant uptick, notably against the Emerging Market Foreign Exchange (EMFX), as investors wrapped up 2024 with a long position on the USD, according to Bank of America.

The rest of the G10 currencies, however, saw a neutral stance from investors, while EM FX was short.

The USD-EM FX demand was especially prominent in the fourth quarter of 2024. Hedge fund positioning was particularly stretched during this period, with real money positioning appearing lighter.

In the G10 currencies, investors ended 2024 with a long position on both the USD and the Australian Dollar (AUD), while the Canadian Dollar (CAD), New Zealand Dollar (NZD), and Swiss Franc (CHF) were short. The USD demand against the Euro (EUR) and British Pound (GBP) was notably high in the fourth quarter.

The Norwegian Krone (NOK) and CAD were the most sold currencies in 2024. Hedge funds were at their maximum long positions on AUD and USD, and at their maximum short positions on CAD.

Real money was very long on GBP, and long on AUD and USD, while it was short on NOK, NZD and EUR. The sentiment for USD in options significantly improved in the fourth quarter against both EUR and GBP.

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Source: Investing.com