Traders who anticipated a year when riskier bets would pay off are overhauling their foreign-exchange positions after an emerging-markets rout led to the worst start to the year for currency funds since 2004.
Hedge funds and other large speculators shuffled holdings of the dollar, yen, pound, Mexican peso and four other major currencies by a net 102,115 contracts in the week ended Jan. 28, according to Commodity Futures Trading Commission data. That’s the biggest realignment since September, with updated figures due today. Currencies from the U.K., Japan and Europe saw the biggest increase in bets on appreciation, while traders added wagers on declines for Mexico’s and Australia’s currencies.
