According to Jinshi Data, Vanguard Group, one of the world's largest asset management companies, bought dollars this week because it believes that the market has over-bet on the Fed's rate cuts. The company closed its short dollar position established in July and expects the Fed's easing cycle to not be as aggressive as the market expects.
Alais Courtney, head of international interest rates at Vanguard Group, said that short positions on the U.S. dollar have increased significantly, but U.S. economic data remains strong, and unless the data deteriorates significantly, the Fed will cut interest rates less than market expectations. Vanguard Group is currently slightly long the U.S. dollar and is betting USD/CHF will rise from 0.84 to 0.90.
