Funds Flow Out of Euro

Foreigners sell European equities; central bankers prefer yen, pound.

The euro’s rebound from its weakest levels since January is in jeopardy as banks from UBS AG to Morgan Stanley say they see money flowing out of the currency.

Foreigners were net sellers of European equities in the past five weeks, according to Zurich-based UBS. Morgan Stanley data show that investors have had a net short, or bearish, position in the currency since September. The reports add to International Monetary Fund figures showing a drop in allocations to the euro by central banks since a 2009 peak.

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