Williams says fund managers increased FX hedge ratios on U.S. holdings during April dollar depreciation.
“Some global fund managers increased the FX hedge ratios of their U.S. asset holdings, particularly amid the notable dollar depreciation in April.”
Williams reports fund managers say higher U.S. asset returns are discouraging diversification away from the dollar.
“Fund managers have also noted that higher relative returns offered by U.S. assets are discouraging diversification away from the U.S. dollar in global currency and asset allocation.”