The US dollar is encountering one of its most vulnerable positions as of late, the one that is weighing hard on the American currency. Major fund managers are now sharing a similar stance on the dollar, adding how the USD is now losing its credibility, with major fund managers reducing their exposure to the dollar by -35 points.
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The US Dollar Is Truly Losing Its Essence
Per the latest report by the Kobeissi Letter, the US dollar is now at an incredibly low point, with global fund managers busy reducing their net exposure to the USD. This development has led the global fund managers to reduce their USD exposure by -35 points, which is deemed as the lowest in 14 years.
To get a clear perspective, this number was up +30 at the start of 2025, one of the highest readings in the USD data set. Moreover, the fund managers have predicted another path for the dollar, anticipating a heavy decline in USD central bank reserves.
“Institutional investors have rarely ever been this bearish on the USD. US dollar net exposure by global fund managers is down to -35 points, the lowest in at least 14 years. This is below the April 2025 bottom, when President Trump surprised markets with Liberation Day. By comparison, at the start of 2025, net exposure was +30 points, one of the highest readings in the data set. Furthermore, 87% of fund managers surveyed anticipate central banks worldwide to continue reducing their dollar holdings in their foreign reserves. The US dollar is facing historic bearish sentiment.”
Grok Responds to the Current USD Fall Impacts
This recent KL post was met with a few anticipatory questions on X. Users were keen to know the impact of this US dollar development. These users asked Grok, X’s official AI mechanism, to tell them the growing impact that this low USD momentum may have on the US economy.
To this, the AI responded that the consistent fall of the US dollar may make US imports expensive, increasing inflation and the cost of foreign goods. Secondly, it may boost US exports, making American goods cheaper and more competitive abroad. Lastly, Grok added that this USD predicament may impact the purchasing power of the dollar for consumers and travelers.
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