Posted on 03/07/2011 2:32:07 AM PST by TigerLikesRooster
Traders 'Short' Dollar as Currency Loses Attraction
Financial Times | 07 Mar 2011 | 01:59 AM ET
Hedge funds and forex dealers are betting record amounts against the dollar, reflecting a growing belief that the U.S. currency has lost its haven appeal and that euro zone interest rates will soon rise.
As the crisis in the Middle East has worsened, the latest exchange data show that traders are selling “short” the currency. The big U.S. fiscal deficit and concerns about the effect of rising oil prices have been blamed by some for the dollar’s slide.
Figures from the Chicago Mercantile Exchange, which are often used as a proxy for hedge fund activity, showed that short dollar positions surged from 200,564 contracts in the week ending February 22 to 281,088 on March 1.
(Excerpt) Read more at cnbc.com ...
P!
We will know the dollar is dead when Soros shorts it by the billions.
I am a short term swing trader in forex. For example, I did 12 trades in and out of the dollar / euro just today. I will take both sides of a move, depending on whether I think something is over-extended, so I am not a long term trend player...., at least not in the sense of sitting down and just letting it run. I will grab chunks of a trend, but it is not to my personality to trade that way long term.
Anyway, the primary trouble I have with “shorting the dollar” is what to short against. All countries are inflating their currencies. Suisse, Euro, Yen, even the Chinese (although you have to do the Hong Kong dollar as a proxie for that one), ALL are inflationary. The best trade against the dollar is the Singapore dollar, but it is not really liquid. I would say your best bet for long term trades are wheat, corn, silver, gold, soybeans, bellies, rice, and cocoa. You get just as much leverage for those as for forex, and politicians can’t push a button and manufacture more of them.
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