Foreign investors in the U.S. assets are eager to hedge the risk of US dollar volatility

According to the Financial Times, foreign investors investing in U.S. assets are eager to hedge their dollar exposure. This sign shows that Trump's policy agenda's impact on the world's dominant currency has sparked growing concerns. Deutsche Bank analysis shows that since Trump was elected in November last year, U.S. bond and stock investments through foreign exchange market risk hedging have exceeded unheld positions for the first time in four years. “Foreigners may have resumed buying U.S. assets, but they do not want to take exchange rate risks at the same time,” said George Saravelos, a strategist at Deutsche Bank. He added that the investors were "removing their dollar exposure at an unprecedented rate." This behavior helps explain a clear contradiction in the US market since Trump's "Liberation Day" tariff declaration in April triggered a sharp sell-off: how Wall Street stocks achieved a vigorous rebound without triggering a rebound in the US dollar. (Jin Shi)