IMM positioning has been concentrated in commodity-linked currencies, with the largest adjustments centred on AUD, NZD and NOK. Those three were the most actively traded, while NOK, CAD, NZD and AUD all sat within the top five G10 currencies by flow magnitude. The pattern, when set against recent spot moves, implies valuation themes tied to energy and broader commodity prospects.
Flows showed outflows from NOK and CAD, reflecting their oil exposure, and NOK’s status as the most overheld G10 currency alongside modest expectations for further Norges Bank tightening. NZD and AUD have underperformed since early May, with rising input costs pressuring terms-of-trade dynamics and soft Chinese growth limiting support; shifts in U.S. rate expectations versus the antipodeans have historically driven valuations, although IMM positioning indicates much of that reset is already in place. Elsewhere, EUR returned to overheld territory on an aggregate basis after strong net inflows were reinforced by a high-volume session, while USD net flows were broadly neutral, consistent with its dual role as funding and carry.
Commodity Currencies In Focus Amid Shifting Fundamentals
Given today’s date of June 25, 2026, we see the largest positioning adjustments in commodity-linked currencies. The Australian dollar, New Zealand dollar, and Norwegian krone are seeing the most activity. This tells us that the market’s focus is squarely on the outlook for global growth and resources.
We believe traders should consider bearish positions on oil-sensitive currencies like the Norwegian krone and Canadian dollar. The recent Geneva peace summit has pushed Brent crude down 12% in the last month to $82 a barrel, reducing the appeal of these currencies. The krone is especially vulnerable as it is the most over-owned G10 currency, making it susceptible to a sharp unwind.
Conversely, we are becoming more constructive on the Australian and New Zealand dollars, which have already seen significant selling since May. With China announcing a major infrastructure stimulus package last week, demand for non-energy commodities like iron ore is showing signs of recovery. This suggests the underperformance of the Aussie and Kiwi dollars may be nearing an end.
Relative-Value Trades Take Center Stage As US Dollar Dominates
While the US dollar remains dominant, the best opportunities may be in relative-value trades rather than outright directional bets. For example, we see potential in pairing a long position in the Australian dollar against a short position in the euro. This strategy capitalizes on the potential for an Australian rebound while hedging against broad US dollar strength.
The euro has moved back into over-owned territory, making it a good currency to sell against those with a better outlook. Last week’s German industrial production figures for May showed a surprising contraction of 0.8%, adding to concerns about slowing growth in the Eurozone. This weak data provides a solid fundamental reason to favor currencies like the AUD over the EUR.
The US dollar itself is being used for both funding and carry trades, with the Federal Reserve holding rates steady at 3.75% in its June meeting. This reinforces its yield advantage and makes it risky to bet directly against the dollar for now. Therefore, focusing on currency pairs that exclude the dollar can offer a more attractive risk-reward profile in the coming weeks.
