Hedge funds which use computer programmes to track trends are understood to have been the biggest winners from the dollar's slide.
Analysts at Credit Suisse said hedge funds which use "momentum" foreign exchange strategies, which follow trends until computer models tell them to stop, are up 10pc so far this year. In comparison funds following so-called macroeconomic strategies rose 1.5pc in the first-quarter, according to Hedge Fund Research.
Douglas Borthwick, managing director of Faros Trading, a foreign exchange trader, said dumping dollars was a "one-way bet with very little pullback".
The CFTC data shows traders and speculators are piling into the euro and the pound. More than $12bn was placed on bets that the euro would strengthen, a 12pc increase on the previous week.
Long positions worth $3.5bn were put on the pound, a 13pc increase on the previous week.
The dollar has fallen over fears that the Federal Reserve's policy of quantitative easing is undermining the greenback's value. The dollar fell further after Mr Bernanke's historic address on Wednesday when he confirmed the US would keep interest rates low and reaffirmed his commitment to buying back $600bn of Government bonds in a programme designed to pump cash into the US economy.
Mr Bernanke acknowledged inflation fears, but said interest rates were unlikely to change in the next few months.
Alongside the press conference, the Federal Reserve cut its growth forecasts for this year to between 3.1pc and 3.3pc, down from January's projection of between 3.4pc and 3.9pc. New data showed US gross domestic product (GDP) grew 1.8pc year on year in the first quarter of 2011, down from the 3.1pc growth seen in the final quarter of 2010.
Analysts had been expecting growth to hold up better, at 2pc. Sentiment over the US economy was also rattled last month when Standard & Poor's downgraded its credit rating outlook to negative from stable on concerns over America's "very large budget deficits".
No comments:
Post a Comment