Institutional investors continue to sell EUR and BUY yen, lifting hedges they’ve had against equity and fixed income positions.
Some investors are currency neutral and do no hedging, making the currency play part of the overall investment. The funds that have been most active in recent days view currency as its own asset class and hedge accordingly.
Based on their buy-high, sell-low strategy, look for lousy performance in actively managed foreign funds in your 401k statements…
EUR/USD has fallen as low as 1.2688 and USD/JPY as low as 93.26.
