As Hedge Funds Short Dollar, Institutional Investors Dive In

While data from the Commodity Futures Trading Commission shows that hedge funds’ bets against the U.S. greenback have risen by 36% so far this year, Deseret Morning News reports, mutual funds and other institutional investors are raising their stakes in the dollar.

And while hedge funds are known for being savvier when it comes to risky investment bets, than their mutual fund brethren, when it comes to the dollar, the latter typically gets it right; in the past 10 years, when mutual funds were net buyers of the U.S. dollar, its value rose.

“The dollar can do quite well in this slow-growth environment,” said Richard Batty, global investment strategist at Standard Life Investments.

The dollar fell to 78.933 in March, a 13-year low. Since then, it has increased 2.5% in value to 80.993, according to data from the Federal Reserve. Since that time, perhaps influenced by the Fed’s bailout of Bear Stearns, institutional investors have been going long on the dollar.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.