Hedge Funds Increase Bearish Dollar Bets as Bank of America Sees 1.9% April Drop
Hedge funds boosted bearish dollar bets through April 10 as US-Iran ceasefire extension talks eroded haven demand and options risk reversals moved to neutral from year-long bullish levels. Bank of America’s Asia Pacific G-10 currency trading head says funds sold into dollar strength, driving a 1.9% April decline.
1. Hedge Funds Shift to Bearish Dollar Trades
Hedge funds added to bearish dollar positions through April 10 using a proprietary trading model, with options risk reversals showing the premium to hedge against a stronger dollar has narrowed to neutral levels last seen in late February.
2. Bank of America Commentary and Dollar Index Decline
Bank of America’s Asia Pacific G-10 currency trading head, Ivan Stamenovic, reports that funds are selling into dollar strength rather than buying dips, coinciding with a 1.9% decline in the dollar index during April following a 2.4% gain in March.