It might have little to do with the Federal Reserve
by Joseph Adinolfi and Ellie Ismailidou
Market Watch
Economists and market analysts have pinned the dollar’s recent weakness on diminishing expectations for a Federal Reserve interest-rate hike by the end of 2016.
But some say there might be a more plausible explanation.
Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said in a Tuesday note, that a rash of maturing Treasurys will leave foreign investors with billions in cash looking for a home. And given the rising cost of hedging dollar-denominated investments, they might not be as eager to reinvest that money in the U.S. Read the note here.
According to Chandler, $54.56 billion in U.S. Treasurys mature in August. The Treasury is also on the hook for $37.45 billion in coupon payments.