Why The World Started Hedging Its US Dollar Exposure

Odd Lots

Bloomberg

News, Investing, Business, News Commentary, Business News

4.4 • 1.6K Ratings

🗓️ 23 October 2025

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

Some economists expected that the dollar would strengthen when the tariffs were imposed. Instead, the opposite happened. The dollar fell sharply and it's been a poor performer all year. Concurrently, it's been a great year for a lot of dollar-denominated assets, like stocks. Even US Treasuries have rallied this year. So what's going on? On this episode, we speak with recurring Odd Lots guest Hyun Song Shin, Economic Adviser and Head of the Monetary and Economic Department at the Bank for International Settlements. Per his work, the world didn't abandon the US dollar, but it did start hedging exposure to it. We discuss this phenomenon, as well as other risks on the macro landscape.

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Transcript

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0:00.0	There are two kinds of people in the world.
0:01.8	People who think about climate change and people who are doing something about it.
0:06.1	On the Zero podcast, we talk to both kinds of people.
0:09.1	People you've heard of, like Bill Gates.
0:11.0	I'm looking at what the world has to do to get to zero, not using climate as a moral crusade.
0:17.5	And the creative minds you haven't heard of yet.
0:19.7	It is serious stuff, but never doom and gloom.
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0:47.9	Music Radio Studios. Podcasts Radio News. Hello and welcome to another episode of the All Thoughts podcast.
0:51.2	I'm Tracy Allaway.
0:52.1	And I'm Joe Wisenthall.
0:53.8	Joe, there are so many
0:55.1	huge stories that you could pull out of this year. But I mean, like some actually really,
1:00.1	really big ones. So we had Liberation Day and the market crash. We had the continued weakness
1:07.0	in the U.S. dollar, which has been this sort of slow burn crash across the year.
1:12.9	And we're recording this, let's see, October 17th and, you know, dollar down yet again.
1:18.8	Although it is down, but however, there's been a little, you know, it hit its low in mid-September.
1:23.9	Don't make apologies for the dollar, Joe.
1:25.8	No, you know, I just like, keep going.
1:28.6	Then I might add something.
	...

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