Group 1 - A new strategy called "hedging the dollar" is gaining traction in global capital markets, with international funds flowing into the US while a potential $1 trillion shorting wave against the dollar is brewing [1][5] - Major Wall Street banks, including State Street, Deutsche Bank, and BNP Paribas, predict that this hedging wave will significantly pressure the dollar's performance in the coming year [2][8] - The shift towards "dollar-hedged" US asset ETFs has seen inflows surpass "non-dollar-hedged" funds for the first time in a decade, indicating a historic change in investor behavior [2] Group 2 - The estimated scale of the hedging wave is around $1 trillion, which would restore the hedging ratio of global investors holding over $30 trillion in US stocks and bonds to the average level of the past decade [5][6] - The traditional view of the dollar as a safe haven during crises has been challenged, particularly after the Trump administration's punitive tariffs led to a sell-off in US stocks and bonds, contributing to the dollar's decline [9][10] - Current foreign holdings of US assets amount to approximately $20 trillion in stocks and $14 trillion in bonds, with a noted decrease in hedging ratios for both fixed income and equities in recent years [11] Group 3 - The trend of increasing hedging is evident, with a recent survey indicating that 38% of global fund managers are seeking to increase currency hedging to counter a weakening dollar, the highest level since June [12] - Some large investors, including pension funds from Canada, Europe, and Australia, have signaled intentions to increase their holdings, reflecting a broader shift in investment strategies [12] - Individual fund managers are also adapting, with some establishing hedging positions early in the year based on expectations of a weaker dollar, while others remain cautious about increasing hedging in the current environment [12]