Tue, Sep 1, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Oil hovers below $80 as hedge funds mounts pressure against the euro

Tuesday, March 02, 2010
Opalesque Industry Update - Oil prices are hovering below $80 this week as pressure is mounting against the euro from speculators and hedge funds, various media reports said.

Oil prices dropped 1.2% in New York on Monday as the dollar advanced against the euro after a top European Union official told Greece to meet its deficit target this year, Bloomberg.com reported. As of 11:05am Singapore time on Tuesday, crude oil for April delivery was at $78.80 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange. The contract fell 96 cents to $78.70 on Monday. Futures were down 0.7% this year.

Last week, crude oil broke through the $80 a barrel but kept falling back as big hedge funds bet against the euro. The fiscal drama in Greece added burden against the euro even after U.S. Federal Reserve chairman Ben Bernanke disclosed that the U.S. would retain its low interest rate, Posterous.com reported. Fears on the Greek economy only pushed the euro down compared to the U.S. dollar, thus affecting crude prices.

Soros bets against the euro
Hedge fund billionaire George Soros, through his Soros Fund Management, recently said he believes the euro “may not survive.” A report by Independent.co.uk said that traders and other hedge funds, including Soros, have been accused of short selling the euro and bet nearly $8bn against the single currency.

Previously, Soros warned that the euro could fall apart even if the European Union forges a bailout deal for the bankrupt Greek economy. Soros was quoted as saying: “Makeshift assistance should be enough for Greece, but that leaves Spain, Italy, Portugal and Ireland. Together they constitute too large of a portion of euroland to be helped in this way.”

Hedge funds heavyweights conspiring against euro
Soros, together with a group of secretive Wall Street hedge fund bosses were believed to have met at an “ideas dinner” at a private townhouse in Manhattan on 8-Feb to “plot to cash in on the fall of the euro.” Soros Fund Management was represented at the dinner, during which guests discussed, among other things, the decline of the euro against the dollar, reports said. Hedge fund titan SAC Capital Advisors was also said to have attended. Subsequent reports indicated that big hedge funds had launched large bearish bets against the euro since last week that were, said WSJ.com on Friday, “reminiscent of the trading action at the height of the U.S. financial crisis in 2008.”

Euro plunged in value
On 25-Feb or two days after Soros made the warning, the euro hit a one-year low against the yen in Asian trading. A dealer at a major Tokyo bank told Marketwatch.com that hedge funds, retail and institutional players accelerated euro-selling for the Japanese currency as news said that Standard & Poor’s Rating Services had warned to it would downgrade Greece by one or two notches by March.

The euro traded at $1.51 in December, but has since fallen to $1.34.

However, the Royal Bank of Scotland Plc (RBS) expressed confidence on Monday that the euro would rise to $1.40 as European officials work on a rescue package for Greece, easing concern of “default and contagion.” Greg Gibbs, a currency strategist at RBS, said that the 16-nation currency is also poised to advance after futures traders placed a record amount of bets that it will weaken, paving the way for a reversal of sentiment.
Precy Dumlao.

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Hedge funds suddenly find real money is back in Argentina's debt, Elon Musk buys more SolarCity stock following hedge fund manager short, BlackRock plans to get into rental-home financing[more]

    Hedge funds suddenly find real money is back in Argentina's debt From Bloomberg.com: The real money is back in Argentina. Before the country’s default in July 2014 (its second in 13 years), most long-term investors abandoned its bond market. As they rushed out, Argentina became a favorit

  2. Activist News - Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping, Meet Europe's best activist investor[more]

    Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping From Businessinsider.com: Carl Icahn has picked his next target: Freeport-McMoRan. Icahn and a group of other investors have snapped up an 8.46% stake in mining company Freeport-McMoRan, according to a j

  3. North America - Hedge fund manager Ray Dalio’s challenge to the Fed[more]

    From Newyorker.com: For some reason, Janet Yellen, the chair of the Federal Reserve, decided to skip this year’s annual Fed conference in Jackson Hole, where monetary policymakers from the United States and abroad get together with some prominent academics to discuss the big issues of the moment. Th

  4. Opalesque Exclusive: Credit-focused hedge fund Numen Capital expects more volatility in Europe in coming months[more]

    Benedicte Gravrand, Opalesque Geneva: A London-based hedge fund, which has just hired two emerging managers, is cautious on Europe. Vassilis Paschopoulos and former Lehman’s colleague Nikos Kargadouris, launched a London-based credit-focused hedge fund called

  5. Performance - Hedge funds bruised by stocks’ meltdown, Capstone’s volatility hedge fund is having a monster month thanks to market mayhem[more]

    Hedge funds bruised by stocks’ meltdown From WSJ.com: Hedge-fund managers like to promise their investors protection from market swings. In the recent stock swoon, many were caught off guard. Billionaire managers such as Leon Cooperman, Raymond Dalio and Daniel Loeb are deeply in the red

 

banner