Speculators' euro shorts hit record high

Currency speculators reduced their bets in favour of the US dollar in the latest week, but bolstered short euro position to record levels, according to data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net long position fell to $15.71 billion in the week ended January 3, from $20.35 billion the previous week. Euro shorts, meanwhile, surged to a record 138,909 contracts.
Being "short" a currency is effectively a bet that it will depreciate. The data from the Commodity Futures Trading Commission's Commitments of Traders report on speculative positioning is used by analysts as an indicator of future market direction. For example, extreme net short speculative positions often signal a rise in the currency, especially if that speculative position conflicts with the positioning of the more influential commercial players.