“Investors think ‘if actually going to be delivered then I don’t need to hold as many dollars’.” “Flows in the past two weeks point to a rapid rethink with dollar demand,” said Michael Metcalfe, head of macro strategy at State Street, adding that recent sales marked the unravelling of “an unusually large US overweight” position. That has helped put the greenback on course for its worst monthly performance in a year, with analysts warning that sales by asset managers could just be the start of a longer-term trend among investors to reduce exposure to US assets. Managers had made “significant” sales every day since weaker-than-expected US jobs data on November 3, according to the bank.
Investors are selling dollars at the fastest rate in a year as they raise their bets that the US Federal Reserve has finished its aggressive campaign of interest rate increases and will deliver multiple cuts next year.Īsset managers are on track to sell 1.6 per cent of their open dollar positions this month, the largest monthly outflow since last November, according to State Street, which is custodian to $40tn of assets.
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