A Couple of Short Articles on a Dollar Comeback

The dollar is rebounding and there are a couple of quick articles to read.

First is The Financial Times quoting the drop off in dollar shorts:

Figures from the Chicago Mercantile Exchange, often used as a proxy of hedge fund activity, showed investors cut their net short positions in the dollar from 172,367 contracts on December 1 to 107,284 contracts on December 8.

The fall in bets against the dollar, which had a notional value of $9.8bn, was by far the biggest weekly positioning shift of 2009, and the largest since July 2008.

This is partly betting the Fed will wind down loose monetary policy.

Another article is Bloomberg:

While none of the 97 economists surveyed by Bloomberg predicts the Fed will begin raising interest rates at meetings today and tomorrow, investors anticipate the central bank will soon begin to drain some of the $12 trillion it has pumped into the economy. Signs of recovery from the first global recession since World War II are increasing, and a Fed report today may show industrial production rose 0.5 percent last month, according to a separate survey.

The Federal Reserve meets today and Wednesday and is expected to change nothing.

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