By Georgia Wells
The net amount of investor cash betting against the euro
decreased 50% in the past week, helped in part by the launch of a
Greek bond buyback plan to help reduce the country's debt
burden.
As of Dec. 4, investors had reduced their net short euro bets to
$5.4 billion, from $10.8 billion the previous week, marking its
smallest amount since September 2011, government data showed
Friday.
The euro strengthened nearly 1.2% versus the dollar during the
period as Greece launched a plan to retire roughly half the EUR63
billion ($81.6 billion) in debt the country owes to private
creditors. The reduced debt burden is part of an agreement with the
country's European and international creditors in exchange for
releasing fresh aid to Athens.
"Things have been in improving in Europe with the buyback in
Greece. The euro has been on an upward trend, so investors [short
the euro] cut their losses," said Charles St-Arnaud, a currency
strategist at Nomura Securities in New York.
The decline in antieuro bets contributed to a broader move in
investor positioning against the U.S. dollar. Traders were net
short the dollar this week for the first time since early
November.
As of Dec. 4, investors held a net $817.7 million short-dollar
position against a basket of currencies. The previous week,
investors held a net $6.5 billion long-dollar position.
Meanwhile, investors continued to increase net bets against the
yen, which hit a fresh five-year high. As of Dec. 4, investors
increased their net short yen position 14% to $13.8 billion from
$12.1 billion the previous week.
The CFTC's report tracks investors' positions on the Chicago
Mercantile Exchange. Although the bets are only a fraction of
global currency trading, they are considered representative of
broad trading trends and general market sentiment.
The data are collected at the close of business Tuesday, so the
report doesn't reflect Friday's better-than-expected U.S. jobs
data.
Write to Georgia Wells at georgia.wells@dowjones.com