(Bloomberg) -- The euro was headed for the longest streak of losses since its inception on bets the European Central Bank is done raising interest rates.
The currency fell for a ninth straight week, the biggest run of declines since it was created over two decades ago. It's down 5.6% against the dollar after peaking in mid-July and currently trading close to the lowest levels since March.
Traders have been ditching the euro over the past two months on bets the ECB will struggle to tighten monetary policy further amid signs of a worsening economy. That view got a boost this week, when President Christine Lagarde delivered a 10th hike and signaled that the peak in rates has been reached.
“The ECB has just given dollar bulls another reason to start shorting the euro,” said Dipak Shah, head of G-10 FX options trading at Nomura Holdings Inc. “We'd expect to see euro shorts to gain momentum, not just against the dollar, but against other currencies as well.”
Read more: Markets Wager European Central Bank Rate Hikes Are Over
Hedge funds have turned the most negative on the euro since the start of the year and analysts have been revising down their year-end forecasts for the currency. The median prediction sees the euro ending the year at $1.09, compared with $1.12.
The euro has fallen 0.5% so far this week to $1.07.
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