Adam Davis#90

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What role do asset managers and pension funds play in forex?

Asset managers and pension funds manage trillions in investments, often across multiple countries. When they buy foreign stocks or bonds, they face currency risk, which they hedge through forex. For example, a U.S. pension fund investing in Japanese equities may hedge USD/JPY exposure with forwards. Benefits: long-term flows from funds support currency trends. Risks: sudden shifts in allocation can trigger sharp moves. Retail traders should watch reports on institutional positioning, as asset manager flows reflect structural demand. These participants highlight how forex is tied to global capital allocation and investment diversification.