MUFG: FX reserve managers big sellers of JPY and AUD in Q1 | Forexlive

MUFG notes that Q1 2025 COFER data revealed large reserve manager selling of the Japanese yen and Australian dollar, while Swiss franc holdings surged. Despite some caution on the euro, a recent OMFIF survey points to improving sentiment that could support EUR demand.

Key Points:

• USD Holdings Steady: The global USD share of FX reserves stayed almost unchanged in Q1, showing the dollar’s resilience in reserve portfolios.

• JPY & AUD Heavy Selling: Reserve managers sharply cut JPY and AUD holdings, highlighting ongoing structural outflows from these currencies.

• CHF Gains: There was a striking increase in Swiss franc holdings, showing its continued appeal as a reserve haven amid geopolitical risks.

• EUR Outlook Mixed: The OMFIF Global Public Investor Survey indicates reserve managers remain cautious on the EUR for now, but sentiment is shifting positively, suggesting more inflows could come.

Conclusion:

While reserve managers held their USD allocations steady in Q1, they aggressively sold JPY and AUD and sharply increased CHF holdings. Signs of improving EUR sentiment may help support the euro’s share in reserves going forward.

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