A piece from Bloomberg with comments from CIB on the US dollar, with comments on investors abandoning their currency hedges on American assets.
CIBC ( Canadian Imperial Bank of Commerce):
- Japan- and Europe-based companies and bond funds "throwing currency caution to the wind" is one critical factor behind the greenback's recent "turbo bid," according to the Canadian Imperial Bank of Commerce.
- "Just put yourself in the shoes of an asset manager in either the Eurozone or Japan that has allocated capital to US assets
- Ask what the incentive is to hedge FX risk given that it offsets your yield pickup."
Here is the link for more while we await AsiaFX to get a bit more active.
So I guess the next question is … What could possibly go wrong? ;-)
