Hedge funds increased their bets against the euro to a record level in the last week of 2011
Many hedge funds lost money betting against the euro last year as the currency remained strong
Hedge funds increased their bets against the euro to a record level in the last week of 2011, increasing pressure on the embattled European common currency as it enters the most testing year of its history.
Many hedge funds lost money betting against the euro for much of last year, as the currency remained unexpectedly strong despite the continent’s worsening financial crisis.
However, the euro suffered a poor November and December and ended the year as the worst performing major currency, dropping to a 10-year low against the yen and a one-year low against the US dollar.
This triggered a renewed surge in bets against the currency in the week ending December 27, according to data from the Commodity Futures Trading Commission in the US, released late in the US on Friday.
The number of short positions in the euro – where investors benefit from a decline in prices – outweighed long positions by a record 127,900 contracts by December 27, up from 113,700 contracts the previous week. The value of the contracts is not disclosed.