With investors betting that the European Central Bank (ECB), has reached the end of its programme of interest rate hikes aimed at tackling inflation, hedge funds have upped their bearish wagers on the euro to the highest level seen in almost a year, according to a report by Bloomberg.
The report cites data from the Commodity Futures Trading Commission as revealing that leveraged investors increased their short position on the currency to 23,306 contracts during the week ended 19 September, the highest recorded since 11 October.
Longer-term asset managers, meanwhile, also reduced bullish bets on the currency for the sixth week running.
Faltering European Economic growth has seen the value of the euro fall for 10 straight weeks, the longest run of losses since its launch more than two decades ago. Rising fears of a recession as inflation falls have prompted traders to bet on a 25 basis point cut by the ECB by July next year, increasing bearish sentiment against the currency which has already seen tethech euro fall 2% versus the dollar this quarter.