Hedge funds are raising their bets against the euro amid growing fears of a regulatory backlash against their trading positions on the specific sovereign debt of Greece and other weak eurozone economies.
Many of the world's biggest hedge funds have become increasingly concerned about fierce criticism by European politicians that their country bets have heightened the crisis of confidence in some markets.
Lord Turner, the chairman of the Financial Services Authority, the UK market regulator, yesterday became the latest heavyweight figure to add his support to an investigation into speculative positions in financial instruments that gain from a fall in prices of sovereign and corporate debt.