Aug 18, 2025
Non-US investors in American equities have lowered their hedge ratio to 21.6%, down 2 percentage points from May, according to data from State Street Markets, a division of one of the world’s largest money custodians (Bloomberg). The decline brings the ratio back to early April levels, before trade tensions disrupted markets and strengthened the dollar.
The shift suggests that concerns about widespread dollar hedging pressuring the currency have not materialized. Analysts had anticipated that foreign investors would increase hedging—often by selling dollars in forward markets—to guard against currency losses. However, the current hedge ratio remains well below historical swings, with Michael Metcalfe, head of macro strategy at State Street Markets, noting that past adjustments have been as large as 10%.
The latest IndexBox data…
