Hedge Funds Seek the Next Big Shorts After Dollar Rally Fizzles
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Hedge funds are scouring for the right currencies to bet against as the opportunities to profit from wagering on the dollar’s strength ebb, according to a money manager, which invests in the funds.
Managers expect the greenback’s gains to be less pronounced following its rally in the last three quarters, said Sam Diedrich, a director at Pacific Alternative Asset Management Co., which oversees about $9.5 billion in hedge-fund investments. What was once the most popular trade in the foreign-exchange market has fallen out of favor as a gauge of the dollar declined 2.5 percent this quarter, following a 20 percent rally in the nine months ended March 31.