Futures Traders Turn Bullish on Euro For First Time Since July

By Ye Xie

April 3 (Bloomberg) -- Futures traders turned bullish on the euro against the U.S. dollar this week for the first time since July, figures from the Commodity Futures Trading Commission show.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop, known as net longs, was 2,265 on March 31, compared with net shorts of 5,458 a week earlier. It is the first time that speculators were net long the euro since the week ended July 22.
The dollar weakened 1.5 percent this week to $1.3491 per euro, from $1.3287 on March 27 as investors sought higher- yielding assets on speculation the worst of the economic recession may be ending.

Net short positions on the euro versus the dollar were 9,039 as of March 17, a day before the dollar dropped a record 3.4 percent versus the euro after the Federal Reserve announced plans to buy as much as $300 billion in Treasuries.

Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange as of each Tuesday.

Analysts and investors often follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices.

To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net
Last Updated: April 3, 2009 16:34 EDT