Hedge Funds Euro Trading

Hedge Funds Hit By Losses Trading the Euro

The fluctuations of the euro have caught many hedge funds off guard. Several large hedge funds have been hit by losses from the European Union currency.  Hedge funds including FX Concepts, Moore Capital Management and Bridgewater Associates are among the funds said to have lost money trading the euro.

FX Concepts, an $8 billion currency-focused hedge fund in New York, struggled with losses as Europe's shared currency unexpectedly surged last month. Other hedge funds in the U.S. and Europe, including Bridgewater Associates Inc. and Moore Capital Management, have also stumbled recently, several investors and bankers say.

For months, Wall Street banks have recommended that investors sell the euro while buying higher-yielding currencies, such as those of emerging-market economies. So far, these bets haven't panned out.

Sentiment on the euro changed suddenly and sharply in the middle of January as European leaders moved closer to working out details of a beefed-up fund to help finance struggling nations, and the European Central Bank even indicated it may raise interest rates sooner than expected, a move that would attract investors to euro-denominated assets. Source

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