State Street: US investors cutting overseas hedging puts pressure on the dollar.

Odaily Planet Daily reports that State Street Group stated the primary reason for the dollar's decline earlier this year was that US investors reduced their foreign exchange hedging of overseas investments, rather than that global investors increased their hedging of US portfolios. "The more noticeable activity comes from domestic US investors adjusting their overseas hedging," said Chris Pizzotti, global head of foreign exchange sales and trading at State Street Markets, at a Federal Reserve Bank of New York foreign exchange market structure conference on Wednesday. "We estimate that domestic US investors have halved their hedging, which has actually contributed to the dollar's weakness. The uncertainty surrounding Liberation Day remains, naturally sparking discussions about de-risking."