The amount of investor cash being bet against the U.S. dollar increased in the past week, reaching its largest position in more than a year, government data showed Friday.
As of Sept. 25, investors had increased their net short dollar positions to $19.6 billion, a 72% increase from the week before.
A short position is a bet that the asset will decline.
The increase came in the week following a new bond-buying program from the Federal Reserve, which was announced Sept. 13. Such bond buying, commonly called quantitative easing, causes the U.S. dollar to decline because the central bank increases the dollar's supply by using it to buy other financial assets.
Investors also reduced their anti-euro bets 32% over the most recent time frame. As of Sept. 25, investors were net short the euro by $8.1 billion, the smallest net euro short position since September 2011.
Investors reduced their anti-euro positions on revitalized market optimism following the European Central Bank'sSept. 6 decision to buy the debt of fiscally frail member countries.
Although investors were still betting against the euro, the position has nearly halved since Aug. 28, when speculative investors were net short the euro $16 billion.
The data are compiled at the close of business Tuesday, so this report doesn't reflect investor positioning in response to the new austerity measures Spain announced for its 2013 budget.
Investors last week also increased by 38% their net bets that the yen would rise. As of Sept. 25, investors held a net $3.4 billion long yen position.
The CFTC's report tracks the positions of speculative investors on the Chicago Mercantile Exchange. The bets are only a fraction of global currency trade, but they're considered representative of broad trading trends.
Write to Georgia Wells at
georgia.wells@dowjones.com
Dow Jones Newswires
09-28-121646ET
Copyright (c) 2012 Dow Jones & Company, Inc.
------------
CFTC PRECIOUS METALS: Bullish Fund Gold Bets at 6-Month High
September 28, 2012
--Managed money funds add bullish bets on gold, silver, platinum and palladium.
--Speculators raise gold position 6.4% to a six-month high.
--Funds increase silver holdings 9.8% to a 17-month high.
Commodity Futures Trading Commission (CFTC) Largest Net Dollar Short Position Since August 2011
