Daofu: American investors reducing overseas hedging putting pressure on the US dollar

The Daofu Group stated that the main reason for the recent drop in the US dollar earlier this year was US investors reducing their foreign exchange hedging for overseas investments, rather than global investors increasing their hedge ratios for US investment portfolios. "The more significant activity comes from domestic US investors adjusting their overseas hedge ratios," said Chris Pizzotti, global head of foreign exchange sales and trading at State Street Markets, at the New York Federal Reserve Bank's Foreign Exchange Market Structure Conference on Wednesday. "We estimate that domestic US investors have halved their hedge ratios, which has actually contributed to the weakening of the US dollar. Uncertainty surrounding Liberation Day remains, naturally leading to discussions about de-risking."