Currencies
Hedge Funds Eye Dollar Parity for Euro as Option Trades Boom
- Rabobank, Wells Fargo and Investec see currency hitting parity
- Balance of risks are skewed toward euro downside, says OCBC
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The euro has kicked off the year on a grim note, and hedge funds see it hurtling toward parity with the dollar — if not lower — in the coming months.
Leveraged funds in Europe and the US rolled down their euro options positions on Thursday as the currency dropped to its lowest level since November 2022, traders said. Some 2.5 billion euro options wagers with strikes targeting parity and below changed hands on Thursday — about four times last month’s daily average, according to Bloomberg’s calculations based on Depository Trust and Clearing Corporation data.