By Allison Bennett Feb. 5 (Bloomberg) -- Futures traders increased bets to a record level that the euro will decline against the U.S. dollar on concern budget deficits in Greece and other European nations will hamper the region’s economic growth. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain, the net position, was 43,741 on on Feb. 2, compared with 39,539 a week earlier, figures from the Washington-based Commodity Futures Trading Commission show. “The current downward spiral in markets stems from confidence, which makes the solution a difficult one,” Sacha Tihanyi, a currency strategist at Bank of Nova Scotia in Toronto, wrote in a note to clients. “The markets are increasingly nervous about what path lies ahead for the euro zone and the euro.” The price of default protection on government debt for Greece, Portugal and Spain rose to a record today on concern the nations’ efforts to rein in their budget shortfalls will hamper growth and cut tax revenue. Global stocks fell, with the MSCI World Index dropping 1 percent. Greece’s biggest union approved yesterday the second mass strike this month and tax collectors began a 48-hour walkout. The euro declined for a third day, slumping 0.3 percent to $1.3678 at 5 p.m. in New York, from $1.3723 yesterday. The shared currency touched $1.3595, the least since May 20. Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange as of Tuesday. Each Friday the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators’ positions because such transactions can reflect an expectation of a change in prices. To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net

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