Why Low FX Volatility May Open The Door To Dollar Hedging

UBS recommends using the current low-volatility environment in major currencies to hedge excess USD exposure. The firm also highlights opportunities in sterling and growth-oriented currencies like the AUD.

Key Takeaways

• 1.Low volatility in major currencies (G3 FX) presents an opportunity to hedge USD exposure.
• 2.Sterling remains undervalued with high carry, making GBPCHF an attractive trade.
• 3.Memory chip stocks face short-term volatility due to concerns regarding AI hardware demand.

Table of Contents

• From Circle One
• Thought of the day
• What to watch: 5 June
• Caught our attention
• Market update
• Global asset class preferences definitions
• Appendix