European Midday Report: Euro firm despite record short positions against single currency

The euro continued its resistance against other major currencies despite data from CME showing traders and hedge funds have amassed the biggest-ever short position against the single currency. Figures released by CME showed investors had increased their positions to nearly $8 billion in the week to February 2. "Deep economic recession has exposed serious fault lines within the Eurozone that will require major corrective action over both the short term and further out," said Howard Archer, Chief European and UK Economist at IHS Global Insight. "Failure to take such action would threaten the very existence of the Eurozone in its current makeup, and there is growing talk that one or more countries could even end up leaving the single currency," he added. EUR/USD rose 55 ticks to 1.3704, EUR/GBP rose 41 to 0.8799 and EUR/JPY climbed 105 to 1.2291. Stocks crept higher, despite fears several governments will step-up monetary tightening measures in coming weeks. The FTSE 100 rose 0.3% and the DAX added 0.1%. March gilt futures dipped slightly, falling 15 ticks to 123.91. The corresponding bund futures fell 21 to 115.22.