Hedge funds have increased their bets against the euro to the largest level since March 2020, as political turmoil in France rattles European markets and weighs on the currency. Leveraged traders held about €11.8 billion ($13.2 billion) in bearish wagers on the euro in the week through Oct. 20, according to Commodity Futures Trading Commission data released on Friday and compiled by Bloomberg. They raised net short positions by 1,305 contracts to 94,138, the highest number of contracts since March 2020.
France has been at the center of bond market anxiety this month as lawmakers struggle to address the country's debt burden and protesters clash with police over the cost of living. The government is bracing for further conflict this weekend.
Speculators have maintained bearish bets on the euro since February. This month's turmoil has deepened growth concerns and raised doubts about whether the European Central Bank will raise interest rates and by how much, potentially widening the rate gap with the US.
The EUR/USD weakened further this week, returning to losses after halting what was a five-week slide. The euro is poised to end the week 0.4% lower.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing