Hedge Funds Get It Wrong With Ill-Timed Dollar, Bond Bets
- Leveraged funds boosted dollar shorts before Fed decision
- Funds also bet that U.S. yield curve would steepen: CFTC data
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Hedge funds couldn’t have picked a worse time to be short the dollar while holding Treasury curve steepener positions.
Leveraged funds boosted net dollar shorts by 21,347 contracts in the week ended June 15, the most since mid-January, according to data from the Commodity Futures Trading Commission. A day later, Federal Reserve officials projected a faster-than-expected pace of tightening, propelling the Bloomberg Dollar Spot Index to its biggest weekly gain in over a year.