Large investment firms seek for profit from weakening US dollar

Large Investment funds are looking for opportunities to acquire the US dollar, since this currency’s price massively dropped on last Friday’s New York trading session.

Last week, Fed Chair’s Janet Yellen said at the Jackson Hole symposium that Fed was not in a rush to raise the interest rates. Right after the outcomes, USD strongly fell versus other currencies. Goldman Sachs - one of U.S. largest investment management firms - immediately sought for every occasion to increase net long positions on the Greenback. AMP Capital Investors Limited - a large global investment manager headquartered in Australia – was even quicker when announcing that they had collected a "significant volume" of USD for a month.

"I think the dollar has groped for the bottom, and I expect a months-long recovery," says Naimi, who heads AMP Capital's dynamic investment fund in Sydney. "The Fed will become more hawkish, as financial conditions soften even after the rate hikes".

The reason for Janet Yellen’s current dovish tone might be because of inflation which remained below Fed’s target in July, leading to increasing doubts as to whether the third rate hike of Fed in December 2017 is either possible or desirable. However, some large investment funds think that investors are underestimating the prospects of further monetary tightening. They consider this an admirable opportunity to profit from a weaker US dollar.
"We continue to view the dollar as undervalued on both short-term and long-term targets," Goldman Sachs Asset Management said last week. "We tend to increase our investment in dollars, but we take into account the risk of Fed’s more-hawkish-than-expected monetary policy due to the weakening of inflation in recent times."

Most investors are worried about the Greenback’s price to be pushed lower, indicating that short positions of USD are prevailing. All eyes in this week are on the “Non-farm Employment Change“ release, which is being considered the key for the third rate hike of Fed.
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