Published by Global Banking & Finance Review®
Posted on April 17, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleRBC BlueBay short sells the US dollar, citing trade war impacts and declining investor confidence. The firm is bullish on the Japanese yen and investing in inflation-linked bonds.
By Summer Zhen
HONG KONG (Reuters) - RBC BlueBay Asset Management has opened short positions on the U.S. dollar, betting on the end of U.S. exceptionalism as President Donald Trump's trade war threatens to destroy decades of trust and credibility in the currency.
The dollar has been falling on concerns over the impact Trump's trade tariffs will have on the economy, consumer incomes and markets, and as investors pull money out of U.S. stocks, signalling doubts over its "exceptionalism" or status as the bedrock of the global financial system.
An index of the dollar's value against six other major currencies is down 4% in April and on track for its worst month since 2022.
"At the beginning of last week, we were selling dollars," said Mark Dowding, chief investment officer for RBC BlueBay's fixed income team, who oversees over $133 billion in assets globally, in an interview.
"There is a loss of credibility in U.S. policy making," he said, adding Trump's tariff policies "didn't feel like it had been very well thought through."
BlueBay was long the dollar at the beginning of the year but closed that position in the middle of the first quarter and has now turned bearish.
The fund is bullish on the Japanese yen and is betting the yen will rise to 135 per dollar, a rise of nearly 6% from current levels, given its undervaluation and as Japanese capital abroad returns home.
Trump's back-and-forth tariff threats have caused wild price moves in U.S. equities, bonds and currencies, sparking a debate over whether the dollar and U.S. Treasuries can maintain their safe haven status.
European and Japanese investors are looking more at domestic assets now rather than putting money in the United States, Dowding said,
"We think it could end up bringing about a longer-term turning point for the value of the U.S. dollar."
Dowding believes the Federal Reserve is unlikely to cut interest rates in the near term as tariffs could disrupt supply chains, creating shortages and driving inflation higher.
"We continue to see volatility in Treasury prices," he said, adding he is waiting for a good entry point.
"If the 10-year yield went down below 4.2%, I'd want to sell. If the yield went above 4.8%, I'd want to buy."
Among other trades, he has started to buy inflation-linked bonds in the U.S. and Europe.
"We think the inflation is going up to 4% in the U.S. this year," he said.
(Reporting by Summer Zhen; Editing by Shri Navaratnam)
The article discusses RBC BlueBay's decision to short sell the US dollar due to declining investor confidence amid trade war concerns.
BlueBay is short selling the US dollar because of the perceived end of US exceptionalism and the impact of trade tariffs on the economy.
BlueBay is bullish on the Japanese yen, expecting it to appreciate against the US dollar.
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