Hedge-Fund Bets Against Emerging Currencies Get Crowded
- Paamco says popularity of the trades is fueling volatility
- Currencies of Malaysia, Brazil, Turkey are worst performers
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Hedge funds are piling into bets that the dollar will strengthen against emerging-market currencies, especially those vulnerable to falling commodity prices, according to a money manager who invests in the funds.
The popularity of the trade will fuel volatility in those currencies should such funds adjust their positions, said Sam Diedrich, a director at Pacific Alternative Asset Management Co., which oversees about $9.5 billion in hedge-fund investments.