BNY Sees Dollar Hedging Pressure as Global Portfolios Rebalance
BNY’s Geoff Yu reports that elevated USD exposure across global portfolios is generating rebalancing signals, recommending increased FX hedges rather than selling U.S. assets.
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Global portfolios have accumulated significant USD positions, driven by robust inflows into U.S. equities and bonds. According to BNY’s Geoff Yu, this has created substantial rebalancing signals.
The bank advises clients to increase foreign exchange hedges rather than liquidate U.S. asset holdings. Hedge ratios are currently low, and dollar allocations remain elevated.
Source: FXStreet Forex News