Earlier today we highlighted how traders appeared to be increasing their short-biased bets against the U.S. dollar, according to Reuters.
Yet there’s more to the situation than that… as shown below, Morgan Stanley believes that the net short position against the U.S. dollar is now the largest it has been in years (The blue shaded area below). Their data is based on their own calculations and Bloomberg.
Meanwhile, the net-long position for the euro is the larger than it has been for many years, except for a few times just a month or so ago.
A Finviz chart of the euro vs. the dollar shows how the euro remains at a much weaker level than it was at the beginning of the year, despite the substantial amount of long-biased bets on the currency.
(Via Morgan Stanley, Calvin Tse, 13 September 2010)