Hedge funds bet against emerging market currencies

Singapore

HEDGE funds are piling into bets that the dollar will gain against emerging-market currencies,especially those vulnerable to falling commodity prices, according to a money manager which invests in the funds.

The popularity of the trade will fuel volatility in those currencies should such funds adjust their positions, said Sam Diedrich, a director at Pacific Alternative Asset Management Co, which oversees about US$9.5 billion in hedge-fund investments.