Futures Traders Bet on Dollar Gain For First Time Since 2005 ...HUH?

[Dover]

Read the whole article and still don't get it.

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Futures Traders Bet on Dollar Gain For First Time Since 2005

By Bo Nielsen and Ye Xie

May 2 (Bloomberg) -- Futures traders are betting for the first time since December 2005 that the dollar will gain against the euro.

The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain, known as net shorts, was 21,315 on April 29, compared with net longs of 18,907 a week earlier, figures from the Washington-based Commodity Futures Trading Commission show.

``The dollar has already turned against the euro,'' said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut. ``The dollar will go to $1.52 in a straight line.''

The dollar increased 0.3 percent to $1.5424 per euro at 5 p.m. in New York, from $1.5474 yesterday. It touched $1.5361, the highest level since March 24...cont'd

http://www.bloomberg.com/apps/news?pid=20601087&sid=anL286vy_iZM&refer=worldwide


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And then there is the usual fanfare (hey, let's have a parade!):
http://news.yahoo.com/s/ap/20080503/ap_on_go_pr_wh/bush

..."We have been through a recession, we have been through a terrorist attack, we have been at war, we have had corporate scandals, we have had major natural disasters," Bush said. "And yet this economy always recovers."

Yes George, I'm sure everyone is just giddy with confidence and excitement over the news.
Now, watch me pull a rabbit outta my hat. And thanks for the concise summary of the Bush Years.

[sharesunited]

1. What's not to get about it? You mean why the dollar should ever rise? Ever?

[notesdev]

2. It's arguable

that the Euro is quite a bit overvalued at this time.

Betting on the dollar vs. the Euro right now is betting on a correction of a long term trend, which is probably due.

It's fascinating to see such massive amounts of money being shifted around into different sectors in a desperate flight to safety, this is the phenomenon that is pushing up particular sectors when the fundamentals don't justify the price movements.

They're finding that there really isn't any place to safely put one's money right now.

[judasdisney]

3. Irrational Exuberance prospers forever