10 February 2021
In the most unusual of years, 2020 will be remembered in FX for the market implications related to COVID-19, Brexit, and the US election. A culmination of factors led to significant US dollar weakness, calling into question the dominance of the US dollar and its status as the world’s reserve currency. As the US dollar continues to weaken into the New Year, the rising adoption of digital currencies in investor portfolios has gained momentum.
As the landscape can shift quickly as it did in 2020, institutions should refresh their currency hedging policies prior to seismic shifts in the FX markets, holistically managing currency risk and providing downside protection in falling markets.