Jefferies' Greed & Fear: Traders Should Move Money From US Dollar To Asian-EM Currencies, Says Chris Wood

The bearish call on the US currency has been a consensus for weeks as Wood did not see any resistance or opposite view in investors' meet. The dollar index, which measures the US currency's strength against six major currencies, cannot sustain any rally at all, he said.

In such occasion, traders should not focus on short-term outlook when it comes to taking a decision about positioning, the report said.

Market participants are more focused on geopolitics rather than the rising federal funding requirement in defence sector, with the US' involvement in the conflict. This involvement is in clear contrast to President Donald Trump's campaign during election. The interesting point which requires monitoring is whether Trump is interested in changing the regime of Iran like Israel. Greed and Fear thinks the possibility is less.

The US net investment income has turned negative for the first time since the relevant data series began to be published in 1960. The net international investment fell from an annualised 1.43% of GDP in the four quarters ending in April-June of 2018 to a record negative 0.07% of GDP in the four quarters ending in July–September in 2024, the report said.

The net international investment position deficit has risen from $7.8 trillion or 39.9% of GDP at the end of 2017 to a record $26.2 trillion or 89.9% of GDP at the end of 2024. It has been in deficit since 1989, the report said.

Moreover, US current account deficit increased to 6% of GDP in the first quarter of 2025, the highest quarterly deficit since third quarter of 2006, when it reached the record high of 6.3% of GDP, the report said. "Tariff-related front-end loading of demand is clearly a dynamic at work here."