WEST PALM BEACH, FL (HEDGECO.NET) – The US dollar rebounded on Wednesday; from its new lows many currency traders scrambled to cover their short positions betting on further declines on the currency.Hedge funds helped the dollar rally as many funds continued to cover their short dollar positions. The dollar traded at 107 Yen, for the first time in several weeks, some currency analysts said therally was partly caused by the Japanese Monetary Authority, which sold a significant quantity of Yen.
But other analysts think that massive dollar buying by hedge funds may have played a big role in the dollar rise. According to Craig Russell, senior currency analyst at Alaron Trading company, many hedge funds took profit in their short dollar positions, many of such positions were initiated around November last year.
Technical analysts watching the Euro trend line charts explained that the Euro broke its trend line support, such warning are perceived as early sign that the ensuing rally is about to loose steam. The euro traded at $1.2675, sharply down from $1.2835 range reached earlier. Euros life time high against the dollar was $1.293. It is uncertain if this is a change in trend or not. Currency analysts are not exactly sure if Hedge Funds are going long on the dollar or not, but certainly their recent activities by buying the dollar has helped the rally.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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