Currency hedge funds struggle with political headwinds

Hard currency

money1

In an environment dominated by political risk and government intervention, few asset classes behave as they are expected to. This is especially true of foreign exchange (FX).

Many hedge funds trading this asset class struggled in 2011 as political headwinds increasingly dominated exchange rates, whether they focused on G10 currencies or emerging markets.

Yet the case for investing in FX strategies remains compelling given the sheer size and liquidity of the market and the negative correlation of s

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