{"id":710859,"date":"2026-01-21T13:11:14","date_gmt":"2026-01-21T13:11:14","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/710859\/"},"modified":"2026-01-21T13:11:14","modified_gmt":"2026-01-21T13:11:14","slug":"major-australian-pension-fund-trimming-us-dollar-exposure-on-weakening-outlook","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/710859\/","title":{"rendered":"Major Australian pension fund trimming US dollar exposure on weakening outlook"},"content":{"rendered":"<ul data-testid=\"Summary\" class=\"summary-module__summary__QjADA\">\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">ART increases hedging to reduce exposure to weakening US dollar<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">US dollar expected to weaken due to interest rate cuts<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Global volatility and trade tensions contribute to market uncertainty<\/li>\n<\/ul>\n<p>SYDNEY, Jan 20 (Reuters) &#8211; Australia&#8217;s second-biggest \u200bpension fund says it is reducing its exposure to the U.S. dollar through currency \u200chedging as falling interest rates and ongoing global volatility have investors around the world reassessing their U.S. allocations.<\/p>\n<p>Andrew Fisher, Australian Retirement Trust&#8217;s (ART) general manager of total portfolio management and resilience, said the prospect of U.S. rate cuts while some other major economies were expected to lift rates would weaken the dollar this \u200cyear.<\/p>\n<p data-testid=\"promo-box\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__promo-box__hVl8h\"> Sign up  <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/major-australian-pension-fund-trimming-us-dollar-exposure-weakening-outlook-2026-01-20\/undefined?location=article-paragraph&amp;redirectUrl=%2Fworld%2Fasia-pacific%2Fmajor-australian-pension-fund-trimming-us-dollar-exposure-weakening-outlook-2026-01-20%2F\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">here.<\/a><\/p>\n<p>Financial markets have priced in about 50 basis points worth of interest rate \u200bcuts in the U.S. in 2026, whereas rates are expected to <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/boj-signal-more-rate-hikes-yen-politics-fuel-inflation-risks-2026-01-20\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">rise in Japan<\/a> and <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/asia-pacific\/australia-consumer-sentiment-stuck-doldrums-amid-rate-jitters-2026-01-12\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">Australia<\/a> and remain steady in <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/ecb-steady-rate-path-now-fed-tussle-risk-chief-economist-warns-2026-01-16\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">Europe<\/a>.<\/p>\n<p>ART has A$353 billion ($237.39 billion) of funds under management and is the second-largest fund in Australia&#8217;s \u200dA$4.5 trillion pension system, known as superannuation.<\/p>\n<p>Fisher said while ART was not reducing its U.S stock holdings, it was increasing its currency hedging position to reduce exposure to a forecast weakening greenback.<\/p>\n<p>&#8220;The U.S. dollar seems to be the \u2060one place where I think the U.S. administration is going to get what it wants, which \u200dis a weaker dollar,&#8221; Fisher told Reuters in an interview on Monday.<\/p>\n<p>&#8220;They made it clear they want the dollar \u200cto \u200cweaken. It&#8217;s hurting U.S. competitiveness, and I think they&#8217;re going to succeed.&#8221;<\/p>\n<p>Previously, almost all pension fund investors in U.S. equities would have very little currency hedging because the dollar was expected to rise on negative shocks.<\/p>\n<p>A low-hedging strategy would insulate a fund because if the value of its U.S. stocks \u2060fell, it would be cushioned \u2060by the dollar also \u200bgoing down. ART holds about A$53 billion of U.S. stocks, according to the fund&#8217;s figures.<\/p>\n<p>&#8220;We&#8217;re not going to change our allocation to U.S. equities, we&#8217;re just going hedge more of the U.S. equities and unhedge more of the \u200dother equities,&#8221; Fisher said.<\/p>\n<p>&#8220;Our Japanese exposure might be fully unhedged and our U.S. exposure might be much more hedged than it has been in the past to try and get that balance right,&#8221; he said.<\/p>\n<p>While the dollar traded \u200bnear a six-week high last week, the currency has eased \u200dthis week against the safe-haven yen and Swiss franc after U.S. President <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/us\/donald-trump\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">Donald Trump<\/a> threatened additional <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/tariffs\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">tariffs<\/a> on goods imported from European nations \u200bthat oppose his planned takeover of Greenland.<\/p>\n<p>($1 = 1.4870 Australian dollars)<\/p>\n<p data-testid=\"SignOff\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__full_width__kCIGb body-module__extra_small_body__Bfz20 sign-off-module__text__LQAMP\">Reporting by Scott Murdoch; Editing by Jamie Fered<\/p>\n<p data-testid=\"Body\" dir=\"ltr\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__element__5eCce article-body-module__trust-badge__5mS3f\">Our Standards: <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__medium__2Rl30 text-module__small__sph8i link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n<p><a href=\"https:\/\/www.reutersagency.com\/en\/licensereuterscontent\/?utm_medium=rcom-article-media&amp;utm_campaign=rcom-rcp-lead\" target=\"_blank\" dir=\"ltr\" class=\"button-module__link__A3sD0 button-module__secondary__70gBu button-module__round__QDFgq button-module__w_auto__Sem-F\" data-testid=\"LicenceContentButton\" rel=\"nofollow noopener\">Purchase Licensing Rights<\/a><a data-testid=\"AuthorBioImageLink\" class=\"author-bio-module__author-image__jcaG3\" href=\"https:\/\/www.reuters.com\/authors\/scott-murdoch\/\" referrerpolicy=\"no-referrer-when-downgrade\" tabindex=\"-1\" rel=\"nofollow noopener\" target=\"_blank\"><\/a><\/p>\n<p data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__base__o--Cl body-module__extra_small_body__Bfz20 author-bio-module__description__9ynkB\">Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers the Australian financial services sector and superannuation. He is based in Sydney.<\/p>\n","protected":false},"excerpt":{"rendered":"ART increases hedging to reduce exposure to weakening US dollar US dollar expected to weaken due to interest&hellip;\n","protected":false},"author":2,"featured_media":710860,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3093],"tags":[124884,521,124888,213028,213029,51,202988,213025,84737,202126,202022,201804,84738,124890,3671,474,84739,210904,12496,124880,107673,213030,84740,202119,124887,2499,213026,201801,213027,213024,202026,16,15,978],"class_list":["post-710859","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-amers","tag-asia","tag-asxpac","tag-au","tag-aunz","tag-business","tag-cen","tag-cinv","tag-cmpny","tag-destortao","tag-dli","tag-easia","tag-eco","tag-emrg","tag-fin","tag-finance","tag-fins","tag-frx","tag-fund","tag-gen","tag-int","tag-jp","tag-mce","tag-mtpix","tag-namer","tag-personal-finance","tag-pfund","tag-privt","tag-rtm","tag-rulesworld-australia","tag-soci","tag-uk","tag-united-kingdom","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115933261483466772","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/710859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=710859"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/710859\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/710860"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=710859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=710859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=710859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}