Managers scrap dollar hedges after currency hits three-year low

Leading fund managers including RWC income duo Ian Lance and Nick Purves have removed US dollar hedges on their portfolios in the view the currency has bottomed, leaving them at odds with currency specialists who predict further falls.

The dollar plunged to a three-year low against a number of currencies last week and threatened to hit an all-time low as it reached $1.46 against the euro. The DXY index, the US dollar exchange rate against a basket of currencies, fell to 72.7, surpassing the most recent low of 74.17 in November 2009. Managers said the one-way trade on the dollar has left it looking undervalued and they see upside from here. Lance and Apollo Multi-Asset Management’s Tom McGrath have both removed US dollar hedges, while Cazenove’s multi-manager duo Marcus Brookes and Robin McDonald have added a 5% long...