Currency speculators increased bets in favour of the US dollar to the highest level since at least mid-2008, according to data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position rose to $28.52 billion in the week ended May 15, from $20.95 billion the previous week.
Short euro positions climbed to 173,869 contracts, the highest on record, from 143,984 a week earlier. The euro zone common currency has sold off in recent weeks as concerns about Spain's banking system and political chaos in Greece threw doubts on whether Europe can commit to austerity plans crucial to tackling the region's debt crisis.
The euro hit a 4 month low of $1.2640 on Friday. To be short a currency is to bet it will decline in value, while being long is a view its value will rise. The Reuters calculation for the aggregate US dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc, Canadian and Australian dollars.
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