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Traders Bet Net $23.4 Billion That Euro Will Fall

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NEW YORK -- Speculators piled up the largest net gamble against the euro's rise since February as of Tuesday, totaling $23.4 billion, government data showed Friday.

Traders held a net 143,984 contracts betting the euro will fall against the dollar, according to the Commodity Futures Trading Commission's weekly report on the commitments of traders. That bet was 32% larger than in the previous week.

Earlier this week, the euro broke through the $1.30 barrier to trade below that level as investors returned to worrying about the euro zone's sovereign-debt crisis.

The CFTC report, which details the movements of the Chicago Mercantile Exchange's speculators, is seen as a clue to hedge funds' trading.

Speculators also bet 62% more this week that the dollar would rise against other currencies, holding a net $20.5 billion, the data showed.

Traders held a net $6.4 billion in bets against the yen, or 41,093 contracts. That position was 18% smaller than last week.

For the Swiss franc, traders held a net $2.2 billion in pessimistic bets, 13% higher than last week, for 16,494 contracts.

Markets continue to think the Canadian, Australian, and New Zealand dollars will appreciate against the U.S. dollar, but investors slashed their bets. They lost the most confidence in the Australian dollar, with a net wager of $2.5 billion for it to climb against the U.S. dollar, down 53% from the previous week.

For the British pound, traders' net gambles were up by half this week, to a net $6 billion.

The CFTC's weekly report shows speculative investors' positions in major currencies held against the dollar.

-By Chana R. Schoenberger, Dow Jones Newswires; 212-416-4803; chana.schoenberger@dowjones.com; @djfxtrader

-Stephen L. Bernard contributed to this article.

 

(END) Dow Jones Newswires

May 11, 2012 17:25 ET (21:25 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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