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By Brett Morrell, Head of Risk Solutions at technology provider Derivative PATH.

As global markets continue their attempts to adjust to the policies of President Trump's second term, there is a resounding sentiment of uncertainty and volatility. However, one consistent market theme that appears to have staying power is the strength of the USD compared to other global currencies. While Trump's continued push for tariffs, moves towards deregulation, and implementation of other trade tactics have thrown global currencies - and at times the US dollar - into a tailspin, the USD has found consistent opportunities to bounce back. When it comes to fund managers that hedge FX risks related to global investments, a strong USD presents numerous opportunities and considerations.

Because the majority of private capital is raised in USD, many hedge managers hold long USD and short foreign currency positions related to existing hedges. They also have an ongoing need to execute new hedges to buy USD and sell foreign currencies to hedge the FX risk related to new non-USD investments. In order to effectively evaluate current hedge positions versus new hedge executions, fund managers must look through varied lenses and operate with unique thought processes. For example, for managers simultaneously thinking about opportunities related to mark-to-market gains on existing hedges and potential challenges of buying USD through new hedges at historically high levels, they must ope......................

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