Futures traders increased bets that the euro will decline against the dollar to a record level this week amid speculation the region is struggling to contain its sovereign-debt crisis.
Hedge funds and other large speculators had 116,457 more bets the 17-nation currency will fall versus the dollar than gain in the five-day period ended Dec. 13, according to Commodity Futures Trading Commission data. The so-called net-shorts compare with 95,814 a week earlier and the previous record of 113,890 reached in May 2010, when Greece accepted a 110 billion-euro ($145 billion) aid package.
The dollar weakened 0.2 percent to $1.3046 per euro at 5 p.m. New York time. The shared declined 2.5 percent for the week versus the U.S. currency, its largest five-day loss since the week ended Sept. 9.
European leaders unveiled a blueprint last week for a closer fiscal accord to save the currency. Moody’s Investors Service, which said it would review the ratings of European Union nations after the summit failed to produce decisive steps, lowered Belgium’s credit rating two levels today.
Fitch Ratings today lowered France’s rating outlook and put the grades of six other European nations on review for a downgrade.
Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange as of Tuesday. Each Friday, the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors that buy or sell futures to protect against price moves.