Kraken is both a currency exchange for exchanging one currency for another, and a Forex-like market for trading currency pairs. In currency exchange, you must have adequate funds in one currency to exchange for another (you cannot borrow funds for the purpose of exchange). In currency pair trading, however, you always open a position in a currency pair with borrowed funds using leverage. Trading short is only possible with currency pairs, so to open a short position you must use leverage. Only currency pairs are officially considered "positions," so you will only see open or closed currency pairs under the "Positions" tab.
When using the order forms, if you select "None" for leverage, then you are exchanging currency and must have adequate funds. But if you select a level of leverage, then you are opening a currency pair position with borrowed funds. Leverage can only be selected from the "Intermediate" and "Advanced" order forms. Note that there can be currency pairs that can only be exchanged - you will not be able to select leverage for these pairs. Also, there can be currency pairs that can't be exchanged, but can be traded as pair positions using leverage, so you may only have the option to select a level of leverage for some currency pairs. If you are unfamiliar with currency pair trading, please read the "Leverage and Margin" section.