In a week characterised by shifting sentiments around the US debt limit talks and increased pessimism about China, hedge funds and similar investors have favoured the USD, particularly against Asian emerging market currencies such as the Chinese Yuan (CNH) and Singapore Dollar (SGD), and Latin American currencies, most notably the Mexican Peso (MXN). The USD also saw some support against the Euro (EUR) and Swiss Franc (CHF), according to Bank of America (BofA).

On the other hand, corporate investors accelerated their selling of the USD, mainly against the British Pound (GBP) and Asian emerging market currencies, especially the Indian Rupee (INR). In Q1, corporates were selling the USD, but they supported it earlier this quarter before returning to selling in recent weeks.