Futures Traders Bet on Dollar Gain For First Time Since 2005

[ballsalicious]

Source: Bloomberg.com

Futures Traders Bet on Dollar Gain For First Time Since 2005

By Bo Nielsen and Ye Xie

May 2 (Bloomberg) -- Futures traders are betting for the first time since December 2005 that the dollar will gain against the euro.

The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain, known as net shorts, was 21,315 on April 29, compared with net longs of 18,907 a week earlier, figures from the Washington-based Commodity Futures Trading Commission show.

``The dollar has already turned against the euro,'' said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut. ``The dollar will go to $1.52 in a straight line.''

The dollar increased 0.3 percent to $1.5424 per euro at 5 p.m. in New York, from $1.5474 yesterday. It touched $1.5361, the highest level since March 24.

The dollar rose 1.3 percent against the euro this week, its biggest rally since March, and has appreciated 3.6 percent from a record low of $1.6019 reached on April 22. It's the first time the dollar has posted two weeks of gains since December.



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=anL286vy_iZM&refer=worldwide

[Dover]

1. ???? Is there any rhyme or reason for this 'confidence' ????

How high will it go?

The currency rose after the Federal Reserve cut interest rates on April 30 and said ``substantial'' easing since September would help foster growth. The Labor Department reported today that U.S. employers eliminated fewer jobs in April than forecast, indicating the labor market is weathering the economic slowdown.

Payrolls shrank by 20,000 last month following a revised decline of 81,000 in March. The median forecast of 82 economists surveyed by Bloomberg News was for a drop of 75,000.

The yield advantage of two-year German bunds over comparable-maturity Treasuries has decreased to 1.40 percentage points from 1.85 percentage points on March 31, making dollar- denominated assets more attractive to investors.

[Demeter]

3. Sure! There's a Sucker Born Every Minute--and They all Drink the Koolaid

There's the reason, someone with more facility can make it rhyme for you.

[Rage for Order]

8. The think the Fed has made its last interest rate cut for a while

This will stop the slide in the dollar relative to foreign currencies, and might even provide a minor uptick.

[dipsydoodle]

2. So you'll be able to buy

Iranian oil , paying in Euros of course, for slightly less. Oh happy day :sarcasm:

[pattmarty]

4. I think everybody may be missing the point here;

I believe that there many things that caused our and the world economy to reach this point. I'm not an economist, but all the speculation is causing a lot of craziness in the grain, oil, banking and whatever other markets that can be "bet" on. ALL governments have to start regulating these markets or it's gonna be chaos.

[truthisfreedom]

5. Ahh, so the euro is sliding now.

It's not that the value of the dollar is rising.

[Psephos]

7. By definition the relative value of the currencies depends on their, umm, relative value

Eurozone economic stagnation and persistent unemployment means that Euro central bankers are not going to be able to resist pressure to cut interest rates for a lot longer. If the Euro earns 5% and the dollar earns 2% (numbers for illustration purposes only), then cash flows toward the higher interest rate in Europe, raising the relative value of the Euro. And vice versa.

The dollar is presently undervalued. Students of economic history know that currency swings usually overshoot at the inflection points. Chumps sell when everyone else is selling (or more to the point, when everyone is almost finished selling). Big dogs buy when everyone else is still selling.

[Dreamer Tatum]

9. Oh no...the two are totally unrelated...

:eyes:

[roamer65]

6. Warren Buffett says its going to drop further.

http://www.bloomberg.com/apps/news?pid=20601110&sid=a3VEtvyz40fE

I'd believe the "Oracle of Omaha" before I'd believe slimeball futures traders.