Demand for Hedging Against Dollar Depreciation Reaches Five-Year High

According to BlockBeats, the demand for hedging against potential dollar depreciation has surged to a five-year high due to U.S. President Donald Trump's tariff policies, which may undermine America's economic exceptionalism and weaken the dollar. Institutional data reveals that the three-month risk reversal index, which measures the spread between bullish and bearish options on the dollar against 12 major currencies, has dropped to its lowest level since March 2020, during the peak of the global pandemic. Last week, this index fell below zero for the first time in five years, indicating a greater demand for bearish options that benefit from a weaker dollar compared to bullish options that benefit from a stronger dollar. "The aversion to holding dollars remains dominant in the market," said Chris Weston, head of research at Melbourne's Pepperstone Group Ltd. "The questions surrounding the dollar are not a matter of a single day but rather indicative of significant potential structural changes."