Dollar hedge ratios among major non-US institutional investors fell to 41% as of late June, their lowest reading since at least 2015, with Japanese investors cutting coverage from 62% in 2024 to 41% in the first half of 2026. Similar unwinding occurred in Denmark, Canada, Taiwan, and the Netherlands, with three-month hedge costs hitting multi-year lows. Bitcoin and Ethereum both gained during this period of dollar weakness, reinforcing a pattern seen throughout 2026 where a weaker greenback benefits risk assets. This increased portfolio exposure to dollar fluctuations could amplify market moves, creating symmetrical risk if a catalyst triggers a sharp dollar rebound.
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