The euro, more than any other currency, is responsible for the drop in the U.S. Dollar Index (BEUR) since March. Derivatives traders are betting that’s about to end as the Federal Reserve reduces stimulus as soon as next month.
Traders are paying the biggest premium since September for options giving the right to buy the dollar versus the euro over those allowing for sales. The Dollar Index, which is 58 percent weighted toward the shared currency, will climb almost 5 percent to 85.8 by Dec. 31 from 81.936, according to the median forecast of 12 analysts in a Bloomberg survey.
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