Is the dollar about to spring off its deathbed?

A lethargic recovery and Federal Reserve promises to aid the economy have been hammering the U.S. currency lately. The dollar has lost almost 10% of its value since early June, when enthusiasm over a U.S. rebound started to wane, according to the Fed’s major currencies index, and there is no shortage of voices calling for an even deeper decline.

But for now, the trend could be ready to turn. Speculative bets that the euro will rise against the dollar are at their highest level in a year, according to the Commitment of Traders data published weekly by the Commodity Futures Trading Commission.

That’s a contrarian signal that likely spells a momentum shift, says economist David Rosenberg of Gluskin Sheff.

“Let’s just say that we could well be in for a big short squeeze here on the U.S. dollar,” Rosenberg writes Monday in a note to clients.

Large speculators – that is, those playing the futures and options markets for reasons other than to hedge business exposures – had a net 27,451 futures contracts to buy euros last week, the CME reported. That’s up from a net long position of 2,777 contracts a week earlier and biggest long position since last fall. Each contract gives the holder the obligation to buy or sell 125,000 euros ($171,000) on the expiration date.

What’s more, the large speculators’ net position on the euro has swung from deeply pessimistic to fairly optimistic in less than four months. At the height of May’s sovereign debt crisis and a month later, large speculators were net short more than 110,000 euro futures contracts, according to Chicago Mercantile Exchange data compiled at DailyMarkets.com.

This isn’t to predict a long-term dollar renaissance. The stretched U.S. fiscal position, the weak economic recovery and the increasingly adamant comments from Fed officials in support of QE2 all point to pressure on the dollar for years to come.

But Europe has its problems too, as we have learned, and the fact that the hot money has been plunking down on the euro may be a sign that we’ll soon be hearing a lot more about them.