FOMC surprise led to hedge fund losses, say traders

Fast money caught out by June dollar bounce after Fed’s surprise hawkish tone

Federal-Reserve

Hedge funds are thought to have suffered losses on foreign exchange options following the Federal Reserve’s surprise change of tone in mid-June, which caught the market off-guard and sent the FX market into 48 hours of turmoil.

Hawkish comments from the central bank in its Federal Open Market Committee meeting on June 16 that implied its bond-buying programme could be tapered sooner than expected resulted in a surprise bounce-back in the US dollar, which traders say caught hedge funds on the

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