America
Foreign investors rush to hedge dollar risk amid concerns over Trump’s agenda
Foreign investors in US assets are rushing to hedge against the dollar, a sign of growing concern over the impact of Donald Trump’s agenda on the world’s reserve currency.
According to a Financial Times report on Deutsche Bank’s analysis, hedged investments in US bonds and stocks are outpacing unhedged investments for the first time in four years, following a sharp move since Trump’s election last November.
Deutsche Bank strategist George Saravelos said, “Foreigners may have returned to buying US assets, but they do not want the accompanying dollar risk,” adding that these investors are “eliminating dollar risk at an unprecedented rate.”
According to the Financial Times, this behavior helps explain an apparent paradox in US markets following the sharp sell-off triggered by Trump’s tariff announcements in April: how did Wall Street stocks stage a strong comeback without prompting a dollar recovery?
According to Deutsche Bank’s analysis, 80% of the nearly $7 billion that has flowed into US stock exchange-traded funds domiciled in foreign countries over the past three months has been on a hedged basis. This figure was approximately 20% at the start of the year.
This type of hedge means investors are exposed only to movements in an asset’s price, not to fluctuations between the dollar and their home currency, but they must pay a premium for this protection.
Analysts say the increase in hedging activity has contributed to the dollar’s depreciation of over 10% against other currencies, such as the euro and sterling, this year.
The dollar’s decline pushed the euro above $1.18 on Tuesday, its highest level in four years.
Fund managers report that clients are eager to invest in US stocks amid the artificial intelligence boom but are less willing to bear the associated dollar risk.
Arun Sai, a senior multi-asset strategist at Pictet Asset Management, said the Swiss fund company has increased the dollar hedging on its US stock portfolio, predicting that the dollar is in a “long-term bear market.”
“The dollar will continue to bear the brunt of the erosion of institutional credibility,” Sai added.
According to a September Bank of America survey of global fund managers, 38% of investors want to increase their hedging positions against a weakening dollar, while only 2% want to hedge against a strong one.
“This is not the time to ‘sell America’… It is the time to ‘hedge the dollar’,” said Meera Chandan, co-head of global foreign exchange strategy at JPMorgan.
Weak economic data causing the dollar to fall below its recent trading range could trigger a new wave of currency hedging.
“The flow of hedging will further exacerbate the dollar’s weakness,” Chandan said.
While bond investors often seek to hedge their currency risk to prevent return fluctuations in low-risk investments, the practice is less common among equity investors.
Some noted that the foreign capital flowing into US stocks in recent years contributed to the dollar’s strength, pointing to a virtuous cycle of stock prices and currency gains.
However, this relationship has broken down this year as concerns about the US economy and Trump’s policies have dragged the dollar down. The S&P 500 stock index has risen 12% in dollar terms this year but has fallen 2% in euro terms.
Charles-Henry Monchau, chief investment officer at the Swiss private bank SYZ Group, said he moved to a fully dollar-hedged position in US stocks in March of this year.
Referring to Trump’s statements against a strong dollar, he said, “It was a geopolitical decision. This year is different. This year, you need to be hedged.”
Pension funds in many countries, including Australia and Denmark, are increasingly hedging their dollar exposure.
According to analysis by BNP Paribas, Danish pension funds reduced their unhedged US dollar exposure by approximately $16 billion to $76 billion at the end of June, while Dutch pension funds increased their hedging ratios at the start of the year.
In a report published in June, the Bank for International Settlements stated that currency hedging by institutions outside the US made a “significant contribution” to the dollar’s weakness in April and May, suggesting that Asia-based investors played a key role.
A typical way to hedge against dollar weakness is through derivatives such as currency forwards, which lock in a future exchange rate. These contracts reflect differences in short-term interest rates, and falling US interest rates have made hedging cheaper.
Kamakshya Trivedi, chief foreign exchange strategist at Goldman Sachs, said the falling cost could encourage more hedging from investors in Asia, which in turn could cause the dollar to fall further.
America
Trump administration targets 60 nations with new tariff draft under Section 301
The US administration is proposing new tariffs of at least 10% on imports from 60 trading partners, following an investigation into goods allegedly produced using forced labor.
According to a Bloomberg report citing sources within the Office of the US Trade Representative (USTR), the specific tariff rates will vary based on individual countries’ legislative frameworks regarding forced labor and their capacity to enforce those laws.
Under the drafted regulations, a 10% tariff rate will apply to imports from the European Union, Mexico, Canada, the United Kingdom, Taiwan, and several other nations. Conversely, goods arriving from China, India, Japan, South Korea, Switzerland, and Brazil will be subject to a 12,5% tariff.
The USTR stated that the lower tariff rate will apply to products from nations that prohibit forced labor or have committed to doing so. The agency emphasized that states failing to establish such prohibitions or lacking the capacity to effectively enforce them will face the higher tariff rate.
Bloomberg reported that this step represents a continuation of President Donald Trump’s policy to reinstate across-the-board tariffs on all countries, which had previously been ruled unconstitutional.
The proposed tariffs are the result of investigations initiated under Section 301 of the Trade Act of 1974.
Commenting on the development, Deborah Elms, Head of the Trade Policy Group at the Hinrich Foundation in Singapore, said, “This is highly significant because Section 301 is an extremely powerful tool and is highly unlikely to be overturned. This opens the door to a range of new tariff and non-tariff measures.”
The report noted that the tariffs are being introduced at what could be a turning point for the global economy.
Financial markets are already navigating a sensitive period due to rising gas and oil prices driven by conflict in Iran.
The new tariffs will not take effect immediately. Before implementation, a review and evaluation period will be conducted, which may lead to modifications in the draft proposal.
According to the timeline reported by Bloomberg, written comments on the tariffs must be submitted by July 6. Additionally, the Section 301 Committee is scheduled to hold a public hearing on July 7.
US Trade Representative Jamieson Greer argued that forced labor practices in partner nations force American workers to compete on an unequal playing field. “We will no longer tolerate this unfairness,” Greer said.
On the other hand, the USTR proposed certain tariff exemptions that could affect apparel and textile imports. While these goods could enter the US at reduced tariff rates, quotas would be determined based on the respective countries’ existing textile exports to the US.
Beef, tomatoes, bananas, coffee, orange juice, and several other food products will be entirely exempt from the tariffs. Furthermore, double taxation will not be imposed on metals, specific fuel types, and chemicals that are already subject to other duties.
In May, the US Court of International Trade ruled that the 10% tariff on foreign imports promoted by President Donald Trump was unlawful. Defending the White House’s objectives following the court ruling, Trump characterized the judges as “radical left-wing” and remarked, “Nothing surprises me. We always find different ways. We make a decision and act in another way.”
In February, the US Supreme Court also ruled that tariffs established by Trump were contrary to the law. The court concluded that the president had exceeded his authority in imposing those duties. Trump, however, claimed that the court was under foreign influence.
America
Google seeks approval to release 32 million mosquitoes in US disease-control project
Google is seeking federal approval to release nearly 32 million mosquitoes in California and Florida as part of a biological pest-control initiative known as the Debug project.
The little-known program aims to combat disease-carrying mosquitoes by releasing millions of sterile male mosquitoes into the environment, an approach designed to stop “bad bugs with good bugs.”
According to the US Centers for Disease Control and Prevention (CDC), mosquitoes are classified as the world’s deadliest animals. Of the more than 3,500 mosquito species that exist globally, only Aedes aegypti is responsible for transmitting dengue fever, Zika virus and chikungunya, diseases that sicken hundreds of millions of people each year.
In a statement published on the official website of the Debug project, Google described the issue as a difficult problem to solve, noting that many mosquito-borne diseases lack effective vaccines or treatments.
The statement argued that relying on pesticides is not a sustainable solution because such chemicals become less effective over time and can be toxic. It also said that eliminating standing water alone is insufficient because it is impossible to identify every breeding site used by mosquitoes.
For those reasons, Google said a new approach is required and that it found a solution in what it describes as “good” mosquitoes of the same species.
The project website explains the method as follows:
“Good bugs are the same mosquito species as the bad bugs that spread disease. Our good bugs are male mosquitoes carrying Wolbachia, a naturally occurring bacterium found in nature. This bacterium prevents them from producing offspring with wild female mosquitoes. Male mosquitoes do not bite and cannot spread disease, so the good bugs will stop the bad bugs from reproducing. Over time, fewer bad mosquitoes will remain.”
Scientists involved in the Debug project emphasized that the technique relies entirely on a naturally occurring bacterium, contains no chemicals or toxins, and does not involve genetic modification.
Researchers said similar approaches have been used safely for decades to control other pests. They added that the Debug team is combining scientific and engineering expertise with support from international partners in an effort to suppress disease-carrying mosquito populations.
Project scientists said their approach differs from previous eradication programs because it applies the Sterile Insect Technique on a larger scale through the use of data analytics, sensors and automation.
According to information published in the project’s frequently asked questions section, program officials are working closely with national and local governments, community leaders and research institutions.
Officials said they meet with residents in areas targeted for deployment before operations begin in order to better understand local concerns and priorities.
Google is therefore continuing to pursue federal authorization to implement the project in both California and Florida.
A notice published in the Federal Register shows that the US Environmental Protection Agency (EPA) is reviewing Google’s applications for an Experimental Use Permit under the Federal Insecticide, Fungicide, and Rodenticide Act.
According to details contained in the filing, nearly 16 million mosquitoes would be released in Florida during the first year of the project.
A further 16 million mosquitoes would be released in California during the second year.
Members of the public can obtain additional information and submit comments through the federal rulemaking portal by visiting regulations.gov and entering docket identification number EPA-HQ-OPP-2025-3951.
America
US Marines test lower-cost counter-drone system to reduce missile dependence
US Marine Corps personnel tested a new counter-drone defense system during military exercises held in the Philippines in April.
According to a report by The Wall Street Journal (WSJ), the system is designed to avoid the continuous use of expensive missiles and instead relies on a coordinated set of countermeasures.
The system consists of two armored vehicles known collectively as MADIS (Marine Air Defense Integrated System).
One vehicle is equipped with an advanced radar system, while the other carries the Stinger air defense missile system. Both vehicles are also fitted with a small cannon, a machine gun and electronic warfare equipment.
According to the report, MADIS is intended to provide military personnel with multiple options for engaging drones, including cannon fire, missiles and electronic warfare tools.
The objective is to reduce dependence on high-cost weapons when protecting military units and other strategic assets.
US Marine Corps officials told WSJ that one of the system’s most effective features is its ability to fire specially manufactured 30-millimeter ammunition equipped with precision fuzes that detonate as they approach a target.
Steven Sawyer, a former ammunition technician at the NATO Support and Procurement Agency, told the newspaper that 30-millimeter rounds are generally less accurate than missiles but are significantly cheaper to use.
Sawyer said that even if five such rounds were required to destroy a drone, the total cost would remain around $11,250.
By comparison, a single Stinger missile costs about $430,000, while Coyote interceptor missiles used in conflicts in the Middle East are priced between $100,000 and $125,000 each.
Sawyer added that 30-millimeter ammunition has proven effective against Shahed-family drones, which cannot be neutralized through electronic warfare methods.
At the same time, he stressed that US defense companies continue to face difficulties producing sufficient quantities of the ammunition. According to Sawyer, the precision fuzes are highly sophisticated electromechanical devices and only a limited number of manufacturers can produce them at scale.
WSJ noted that countering large numbers of inexpensive drones has become one of the most pressing challenges facing modern militaries.
The US military has encountered the problem directly during operations in the Middle East, where it has been forced to expend limited stocks of extremely costly precision-guided munitions.
Previously, the South China Morning Post (SCMP) reported that Chinese scientists had developed a combat algorithm known as HG-STR based on a “kill them all” concept.
The algorithm was said to enable swarms of fixed-wing drones to autonomously scan the battlefield and destroy enemy targets even if communications are disrupted and lines of sight are obstructed.
In April, The New York Times, citing three sources within defense and intelligence agencies, reported that the Pentagon assessed Russia’s and China’s drone development programs to be more advanced than those of the United States.
The assessment regarding China’s drone capabilities was reportedly based on analysis of a military parade held in China in September 2025.
-
Asia2 weeks agoIran conflict accelerates yuan adoption and record CIPS volumes in global oil trade
-
Asia2 weeks agoXi and Putin deepen partnership with call for ‘multipolar world’
-
Europe2 weeks agoFive EU states push gradual single market access for Western Balkans
-
Middle East1 week agoLeaked documents show IRGC routed Chinese military equipment through UAE
-
Diplomacy2 weeks agoNATO weighs Hormuz security mission if Iran blockade remains in place by July
-
Middle East1 week agoIran says Hormuz transit will remain free but ships must cover operational costs
-
Europe1 week agoFrench justice minister calls for three-year halt to legal immigration
-
Europe2 weeks agoGermany initiates diplomatic contact with France’s National Rally ahead of presidential election
