At a time when the dollar should be sinking, commodity hedge funds are making a killing on its strength. “Long is where you should be and anybody who is not will be in big trouble here,” John Taylor, president of New York-based FX Concepts, with $12 billion AUM, told Reuters. “One of the big guys in the hedge world thinks the dollar is a piece of crap and I couldn’t agree with him more. But there is a time for everything. And timing is never as clear as you would like it.” Indeed, in spite of bad news about the U.S. housing market, manufacturing and inflation, the dollar is up 2% against the euro over the last two weeks and reached a 10-month high against the yen, thanks in part to Japanese worries over North Korea’s reported nuclear tests. And the dollar-bull fad doesn’t seem likely to fade, according to some managers. “The dollar’s gains will probably continue,” predicts Scalene Capital Management partner David Greenwald. “The bottom line is, never fight the trend.”
