Hedge Fund Bulls Breathe New Life Into World's Hottest Currency

Hedge Fund Bulls Breathe New Life Into World's Hottest Currency

4 April 2017, 19:20
Josephine Kreus

The world’s best currency rally this year is finding fresh support from hedge funds.

Leveraged investors turned net bullish on Mexico’s peso for the first time since Donald Trump all but locked up his bid to become the Republican party’s nominee in May, according to the latest data from the U.S. Commodity Futures Trading Commission. It’s a turnaround from when bearish positions reached a record in October amid speculation Trump’s pledges to support U.S. manufacturing would be a disaster for Mexico’s export-dependent economy.

Investors have made the peso the world’s best performer this year, sending it up 11 percent against the dollar, after it plunged to record lows in the aftermath of Trump’s victory. The rally was driven by the idea that the selloff had been too sharp given the lack of clarity about Trump’s exact trade policies as well as friendly comments from U.S. officials. Citigroup Inc. strategist Dirk Willer had said in a note last month that the currency would probably underperform in coming months without fresh inflows from hedge funds.

"The Trump agenda is no longer as frightening as it once was," said David Tawil, co-founder of Maglan Capital in New York. [Read more... http://snip.ly/bnxst ]
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