Euro bearish bets reach record on Draghi bond-buying program
By Bloomberg
In Mario Draghi they trust.
Hedge funds and other large speculators pushed net bearish positions on the euro to a record-high as the European Central Bank president and policy makers embark on an unprecedented 1.1 trillion ($1.2 trillion) sovereign-bond-buying plan designed to stave off deflation and support the economy. The program is also likely to weaken the shared currency as the market is flooded with new euros.
“It’s obviously just a really toxic fundamental story,” Richard Franulovich, the chief currency strategist for the northern hemisphere at Westpac Banking Corp. in New York. “People are very much strongly committed to selling the euro on any strength.”
Net bearish positions on the euro rose to 220,963 contracts in the week to March 24, up from 193,774 in the previous period.
The euro is headed for a ninth consecutive monthly decline against the dollar in March, the longest in the shared currency’s history, after Draghi said this week he’s confident the program will hit its targets in the first month of operation.
The U.S. Federal Reserve, in contrast, is considering its first interest-rate increase since 2006 as economic growth strengthens.