Hedge funds are increasing their bearish bets on the US dollar as the market waits for US Treasury Secretary Bezent to announce more details of the new fiscal plan aimed at dealing with the highest borrowing costs in years. This pressure was evident last Friday. Torsten Schoeneborn, co-head of foreign exchange trading at Barclays London G10, said on Friday: “In particular, we have seen a clear response from hedge fund customers in the online product sector. The dollar sell-off accelerated against the backdrop of a continuous supply of dollars throughout August.” The aggressive steps taken by Bezent have led some investors to believe that the US dollar will eventually “pay the price” for this. They expect that if the Treasury turns to actively managing yields, it will weaken the market's confidence in the dollar. The options market also clearly reflects pessimism about the US dollar. According to one indicator, compared to hedging the risk of the dollar's rise in the next month, the premium required to hedge against the risk of the dollar falling has risen to the highest level since February.

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