Hedge funds are reportedly shorting the dollar as fears rise over its status as the world's number one currency
Hedge fundsare net short against the dollar for the first since May 2018 amid extreme weakness, Bloomberg reported Monday.
- The greenback has fallen about 6% against the euro alone since the start of the year.
- Big government and central bank spending has pushed interest rates down and weakened the
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Hedge funds are shorting the dollar and are bearish on the greenback for the first time since May 2018 in the latest sign that the world's top reserve currency is declining further and unlikely to bounce back any time soon.
Bloomberg reported Monday, citing data from the Commodity Futures Trading Commission, that net futures and forward positions held by leveraged funds against eight
The euro has outperformed the dollar by 6% since the start of the year. Currently the euro is roughly worth $1.18.
The dollar has been weakening since the peak of the COVID-19 crisis
The revelation comes after months of dollar weakness. The bearishness has partly been attributed to the Fed's massive coronavirus
Expansionary monetary and
The dollar weakness is said to be another key reason why investors have piled into gold. A weaker dollar means they can purchase larger quantities of the precious metal more cheaply.Advertisement
Dollar weakness has caught market participants off guard across both sides of the Atlantic.
Win Thin, global head of
"This is one of the rare occasions when Europe will actually outperform the US," the strategist said in a CNBC "Trading Nation" interview. "