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Hedge Funds Are Ditching the Dollar as the Trump Trade Capsizes

President Trump and his administration officials killed the Trump Trade themselves, arguing the dollar is too strong.

By Lananh Nguyen

(Bloomberg) --The fast money is making a quick getaway.

Hedge funds and other money managers cut net bullish bets on the U.S. dollar to the lowest since November, unwinding the Trump Trade that had lifted the greenback since the presidential election. It was ultimately Donald Trump and administration officials who killed the trade, by arguing that the dollar is too strong, while accusing big trading partners including China, Japan and Germany of devaluing their currencies.

Bets that the dollar will rise outnumbered bearish wagers by 231,658 in the week ended Jan. 31, the lowest since Nov. 15, according to data from the Commodity Futures Trading Commission released Friday.

The cuts coincide with a six-week slide in the greenback that’s wiped out more than half its gain since the election. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell 1.2 percent last week and was little changed as of 8:29 a.m. Monday in New York.

Only time will tell what will be the catalyst for the dollar this week.

 

To contact the reporter on this story: Lananh Nguyen in New York at [email protected] To contact the editors responsible for this story: Boris Korby at [email protected] ;Jeremy Herron at [email protected] Dave Liedtka, Mark Tannenbaum

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