Currency investors and money managers have started exiting the US dollar for the first time since mid-2014 as neither the US economy, nor central bank policy, nor corporate earnings have provided any evidence that buying into the greenback will be profitable anytime soon. As US corporate quarterly earnings figures have proven to be a disappointment for a third consecutive quarter, and macroeconomic data indicate the broader economy is increasingly exposed to the risk of recession, US hedge funds’ bearish bets on the greenback are outweighing bullish positions for the first time since July 2014.

Investors are exiting the US currency for one more reason: the Federal Reserve’s dovishness on policy, stemming from the weak performance of the economy, with the Fed’s April policy meeting likely to end with interest rates unchanged. Subsequently, the dollar’s weakness opens opportunities for US enterprises to regain some of their international competitiveness, which they lost to the greenback’s rally in the last 18 months, while pushing oil and commodity prices higher, to the relief of select emerging markets. FULL REPORT