State Street Group said that the main reason for the decline in the US dollar earlier this year was that US investors cut foreign exchange hedging against overseas investments, not that global investors increased their hedging ratio against US investment portfolios. “The more obvious activity comes from investors in the US adjusting their overseas hedging ratio,” said Chris Pizzotti, head of global foreign exchange sales and trading at State Street Markets on Wednesday. “We estimate that investors in the US have cut their hedging ratio in half, which actually contributed to the weakening of the dollar. The uncertainty brought about by Liberation Day still exists, which has naturally sparked discussions about de-risking.”

State Street Group said that the main reason for the decline in the US dollar earlier this year was that US investors cut foreign exchange hedging against overseas investments, not that global investors increased their hedging ratio against US investment portfolios. “The more obvious activity comes from investors in the US adjusting their overseas hedging ratio,” said Chris Pizzotti, head of global foreign exchange sales and trading at State Street Markets on Wednesday. “We estimate that investors in the US have cut their hedging ratio in half, which actually contributed to the weakening of the dollar. The uncertainty brought about by Liberation Day still exists, which has naturally sparked discussions about de-risking.”