USD net short positions have increased for the first time in four weeks, driven by a decrease in long positions. EUR net long positions have decreased for the second week in a row, driven by an increase in short positions. GBP net positions have turned net short for the first time in 22 weeks, driven by an increase in short positions, and JPY net long positions have decreased, driven by an increase in short positions, Rabobank's economists Jane Foley and Molly Schwartz report.

EUR, GBP, JPY face mounting bearish pressure

"Last week the FOMC released its decision to maintain the policy rate at 4.50%, as was widely anticipated by the market. On Friday, August 1, we saw disappointing nonfarm payrolls at 73k, and a two month revision of -258k. The market is positioned for around two and a half rate cuts by year-end. USD was the best performing G10 currency in July, but the worst year-to-date."

"The ECB  released its decision to maintain the policy rate at 2.00% as was widely anticipated by the market and ourselves. Eurozone unemployment ticked lower from 6.3% to 6.2% on July 30, while July CPI registered in line with June data at 2.0%. The market is pricing in a full 25bp cut at the August 7 BoE meeting, bringing the target rate down to 4.00%."

" Japanese Nationwide CPI inflation data for June printed at 3.3% y/y. The US and Japan agreed to a trade framework which includes a commitment from Japan to invest $550b into American industries and a 15% tariff on Japanese exports to the US. JPY has been the worst performing G10 currency in July."