Pioneer Group: market betting on Fed rate cuts is overdone, now slightly long the dollar
Pioneer Group, one of the world's largest asset managers, bought the U.S. dollar this week as it believes the market has gone a little too far in betting on a Fed rate cut. The firm closed a short dollar position it established in July as it expects the Fed's easing cycle will not be as aggressive as the market expects. Ales Koutny, the agency's head of inter rates, said it was not about whether policymakers cut rates by 25 basis points or 50 basis points later in the year. koutny said: “We have seen a significant increase in the short dollar position, but the US economic data remains strong. Unless the data deteriorates significantly from now on, we believe the Fed will cut rates less than the market expects.” Pioneer Group is currently slightly long the U.S. dollar and is inclined to bet on the dollar against the Swiss franc as it expects the pair to rise to 0.90 from around 0.84 currently.
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