The big bets have been against the USD in July, but this maybe an opportunity to buy some, cheap. Ninety-four percent of the 17 money managers overseeing a total of $1.26 trillion surveyed by Ried Thunberg ICAP Inc. expect the dollar to be stronger or steady relative to the euro in next three months, while 59 percent expect it to be stronger or steady against the yen. The New Jersey-based firm is a unit of the world’s largest interdealer broker.
The dollar weakened 2.2 percent in July, according to Bloomberg Correlation-Weighted Currency Indexes, which track the performance of a basket of 10 developed-market currencies. The franc appreciated 5.4 percent, the Aussie gained 0.6 and the yen rose 3.2 percent. The 17-nation euro slumped 3 percent.
Hedge funds and other large speculators had reduced bets against the dollar to 147,684 contracts as of June 28, the lowest level in more than nine months, as European policy makers debated a debt restructuring for Greece. CFTC data as of July 26 show traders added 162,538 so-called net shorts as the focus shifted to the U.S. debt negotiations.
The U.S. currency saw cumulative inflows last week that were higher than the average of the previous year as Treasuries rallied, according to data from BNY Mellon, the world’s largest custodial bank, with more than $20 trillion in assets under administration.
Demand for Treasuries surged on July 29 after a report that the U.S. economy grew more slowly in the second quarter than forecast. Yields on benchmark 10-year notes tumbled 17 basis points, or 0.17 percentage point, last week to 2.80 percent, the lowest level since November. The yield was little changed today.
Strategists haven’t planned for a dollar selloff, maintaining expectations it will strengthen against the franc in the fourth quarter to 85 centimes per dollar, a survey of 38 contributors by Bloomberg shows. The median forecast for the dollar versus the yen has been at 85 since June 20, according to 47 economists in a separate survey.
Shayne Heffernan
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.