Hedge Fund SPX Scraps Bet Against Emerging-Market Currencies

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

One of Brazil’s largest hedge fund managers is ditching a year-long bet against developing-nation currencies as global liquidity fuels appetite for risk.

SPX Capital, which manages about 40 billion reais ($8 billion), scrapped a short position in emerging-market currencies in May, according to a monthly letter to clients. The firm entered the trade between March and April 2019 and doubled down on the wager later last year.

“Even as the global economy entered a deep recession due to the Covid-19 shock, with strong GDP contractions in the first half of the year, the focus is now on the recovery, which is already under way,” SPX said. The firm also mentioned expectations that central banks and authorities will “unconditionally” support the rebound.

Emerging-market currencies strengthened 1.9% this month according to a MSCI Inc.’s index, on newfound optimism over global economic growth as more nations roll back lockdowns. The gauge is still down 3.9% this year, led by a 19% slump in the Brazilian real, and was headed for its biggest drop since early May on Thursday.

SPX said that while there have been positive developments in Brazil, including signals that Economy Minister Paulo Guedes will remain in his post, risks remain amid a deepening recession. The asset manager doesn’t have any relevant net exposure to Brazilian stocks and rates at this moment, according to the letter.

Last month, the firm’s SPX Nimitz fund fell 1.0%, while the benchmark rose 0.2%. The fund is still beating the benchmark by 72 basis points year to date, according to data compiled by Bloomberg.

This article was originally posted on finance.yahoo.com/news/.

Home of Science
Follow me

- Advertisement -




NFL Sunday Ticket is One of the Most Wanted Services

The growth of Netflix is very much expected in the recent time. People are in the search for new internet television packages. With the...

Educational Opportunities Close in Oprah’s Life

Oprah Winfrey's audience continues to expand. Through the years she has made Oprah's Life Classroom and Oprah Winfrey Network one of the most popular...

How Biden wallops Trump

First, the disclaimer: Forecasts can be wrong, as everybody learned from Donald Trump’s startling win in the 2016 president election. No prediction is bulletproof. Now,...

OPEC and allies to decide on historic oil production cut as coronavirus ravages demand

KEY POINTS An emergency video meeting between OPEC and non-OPEC partners, sometimes referred to as OPEC+, started shortly after 4:10 p.m. Vienna time. Energy ministers...

Could the crude oil market bust spell trouble for high-flying U.S. stocks?

Could the current slump in crude oil prices to historic lows mean the U.S. stock market’s recovery since late March is fragile ? That’s a...
Home of Science
Follow me