Investing.com — Demand for the U.S. dollar (USD) saw a significant increase, especially against the Emerging Market Foreign Exchange (EMFX), as investors ended 2024 with a long position on the USD, according to Bank of America.
However, for the rest of the G10 currencies, investor attitudes were neutral, while emerging market currencies were short.
Demand for emerging market currencies was particularly prominent in the fourth quarter of 2024. Hedge fund positioning was particularly under pressure during this period, with real money positioning appearing lighter.
In the G10 currencies, investors ended 2024 long on both the USD and Australian dollar (AUD), while the Canadian dollar (CAD), New Zealand dollar (NZD) and Swiss franc (CHF) were short. Demand for USD against the euro (EUR) and British pound (GBP) was remarkably high in the fourth quarter.
The Norwegian Krone (NOK) and CAD were the top selling currencies in 2024. Hedge funds were at their maximum long positions on AUD and USD, and at their maximum short positions on CAD.
Real money was very long GBP, and long AUD and USD, while short NOK, NZD and EUR. Sentiment for USD in options improved significantly in the fourth quarter against both EUR and GBP.
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