FT.com / Currencies - Traders ‘short’ dollar as currency loses attraction

FT.com / Currencies - Traders ‘short’ dollar as currency loses attraction: "Hedge funds and forex dealers are betting record amounts against the dollar, reflecting a growing belief that the US currency has lost its haven appeal and that eurozone interest rates will soon rise.

As the crisis in the Middle East has worsened, the latest exchange data show that traders are selling “short” the currency. The big US fiscal deficit and concerns about the effect of rising oil prices have been blamed by some for the dollar’s slide."

Figures from the Chicago Mercantile Exchange, which are often used as a proxy for hedge fund activity, showed that short dollar positions surged from 200,564 contracts in the week ending February 22 to 281,088 on March 1.

This meant that the value of bets against the dollar on the CME rose $11.5bn in the week to March 1 to $39bn, $3bn more than the previous record of $36bn in 2007.

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