Hedge fund EDF laments has written to investors about forex market
2022.12.13 12:23
Hedge fund EDF laments has written to investors about forex market
Budrigannews.com – In its most recent investor letter, hedge fund EDL Capital referred to November as a “bloodbath” month in the foreign exchange markets. However, the star manager of his eponymous fund, Edouard de Langlade, predicted that the dollar’s recent weakness would be brief.
In a letter that was made public on Tuesday and seen by Reuters, the $945 million hedge fund manager stated, “We were short JPY, CHF, CNH, NZD, and GBP, which was a bloodbath this month.”
He was referring to the currencies the Japanese yen, the Swiss franc, the New Zealand dollar, and the British pound all rose last month as a wave of selling of the dollar was triggered by inflation figures from the United States that were lower than anticipated.
Following a recent decline, sentiment toward British assets also stabilized, and new finance minister Jeremy Hunt made significant progress toward restoring Britain’s market credibility with a predictable budget.
In November, the yield on British 10-year gilts decreased by 37 basis points, and the FTSE-100 stock index gained nearly 7%.
According to the letter, “Our shorts in the UK were a bit of a disaster as gilts exploded, the snapped back to trade close to its all-time high, and performed strongly.”
However, because de Langlade traded the pound against the euro, the fund did not suffer a significant loss on the currency.
The letter stated that despite November’s mixed performance, the fund managed a 1.16 percent increase in performance for the month and is still up 15.05 percent for the year.
Barclayhedge’s broader global macro index of funds with a similar focus outperforms EDL by almost 7%.
EDL Capital invests based on macroeconomic indicators. It has a mix of stocks, bonds, commodities, precious metals, forex, and other assets in its portfolio. According to the letter, De Langlade has reduced his forex positions and profited from some of his precious metals long positions.
The flexible investments chief leaned toward being long transient U.S. Depository rates, the letter added. He added that, despite the fact that the Federal Reserve currently exudes a hawkish tone, the central bank might alter its policy in response to negative economic data in the United States.
Tuesday’s data showed that consumer prices in the United States barely increased in November, resulting in the smallest annual inflation increase in nearly a year.
