It has been said the Forex market is the largest in the world, with an average daily trading volume approaching $2 trillion. Because there are so many participants and so much turnover, it is difficult to determine who or what is moving the market. For example, as the Euro spirals downward, investors have been trying to pinpoint the source of Euro selling. It seems they have finally found the culprit(s): long-term investors.

It is still unclear whether Warren Buffet, for instance, has unloaded any of his famous $21 Billion+ bet against the USD, which was clearly a losing exercise. Other investors, however, are publicly and privately rushing for the exits. Interviews with investment bankers and money managers reveal long-term investors, especially high net worth families, are selling European assets as well as Euro-dollars, in bulk. In addition, global bond funds, which often hold a large portion of their assets in European debt, have slowly begun to move money into the US, Australia, and emerging markets. The Wall Street Journal reports:

JPMorgan Private Banking…said clients are paying attention to the euro’s woes and have been "very active" in reacting to it. Meanwhile, a currency analyst at Putnam Investment Management…said the investment house has been taking short positions in the euro in its fixed-income and stock portfolios in a bid to profit from euro weakness.

Read More: Euro’s Allure Appears to Wane In Eyes of Long-Term Investors