Komfie Manalo, Opalesque Asia:
The euro capped 2013 with a 26% gain against the Japanese yen and 4% against the U.S. dollar, according to a Reuters report. Although on Tuesday, the euro was 0.2% down at $1.3775, and 0.4 % down at 144.60 yen.
The strong performance of the euro contrasts earlier predictions by hedge fund managers who expected a weak eurozone economy and a strong dollar from the Fed’s QE tapering.
Currency hedge funds have been at the mercy of central bank policy and may indeed continue being so this year. FX Concepts, which closed last year, is a notable victim of the harsh environment for such fund strategies.
The Parker FX Index reported a -0.26% return for the month of November and -1.04% YTD.
The euro's strength was perhaps the biggest surprise in currency markets in 2013, reports the Wall Street Journal. Investors had large short euro positions at the beginning of the year. Only four big banks anticipated in early 2013 that the euro would appreciate by the end......................
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