Tuesday, November 29, 2011

Bets Against Euro Hit 17-Month High

Wall Street Journal
November 29, 2011

Traders placed their largest wager against the euro since June 2010, betting that Europe's sovereign-debt crisis will continue to plague the currency, according to U.S. government data.

Investors' bets that the euro would weaken against the dollar outstripped positions anticipating a stronger currency by $14.4 billion as of Nov. 22, up 11% from the previous week, according to the Commodity Futures Trading Commission's weekly report released on Monday.

At the time, Italian bond yields were trading at about 7%, a level that would make it difficult for the country to finance its debt. With no consensus in Europe as to how to rescue an economy the size of Italy's, investors began to prepare for one or more countries to leave the euro.

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