Foreign investors in U.S. assets are eager to hedge against dollar volatility

Foreign investors in US assets are rushing to hedge their exposure to the dollar, according to the Financial Times, in a sign of growing concern about the impact of Mr. Trump's policy agenda on the world's dominant currency. Investment in US bonds and equities hedged against currency market risk has surpassed unhedged positions for the first time in four years since Mr. Trump's election in November, according to analysis by Deutsche Bank. "Foreigners may have resumed buying US assets, but they don't want to take on currency risk at the same time," said George Saravelos, strategist at Deutsche Bank, adding that these investors were "pulling out of dollar exposure at an unprecedented rate". Such behaviour helps explain an apparent contradiction in US markets since the sharp sell-off triggered by Mr. Trump's April "Liberation Day" tariff declaration: how Wall Street's spectacular rally failed to trigger a dollar rally.