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Hedge Funds Favorite Currency

Hedge Funds Favorite Currency

Survey Shows Dollar is Favorite Currency of Hedge Funds

A recent survey finds that the dollar is the favorite currency of hedge fund managers while sterling is the least favored currency.  57% of participating traders and hedge fund managers claimed the dollar as their favored currency bet, with the Brazilian real and Australian dollar trailing far behind in second place. One explanation for why funds prefer the dollar is that it is seen as a safe currency during economic turmoil and some managers are concerned that the economy may take a second dip.
Sterling enjoys the support of just 3% of respondents, according to the study, which was conducted in February.
Respondents to the monthly survey hold an average of $113 million in assets under management.

Managers who are bullish on the dollar do not generally believe that interest rates are set to rise significantly, the survey found. Instead, their preference for the U.S. currency could be based on its tendency to climb in times of economic stress.
"Managers who expect the global economy to double dip are likely to be bearish on rates and bullish on the U.S. dollar because of its safe-haven status," the report said.
Two-thirds of fund managers expect the Greek debt crisis to spread to other euro-zone countries. Some 15% think that this will lead to the eventual breakup of the euro.  Source

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