State Street Global Markets said earlier this year that the main reason for the dollar's decline was US investors reducing their foreign exchange hedges on overseas investments, rather than global investors increasing their hedge ratios on US portfolios. "More noticeable activity comes from US domestic investors adjusting their overseas hedge ratios," Chris Pizzotti, head of global FX sales and trading at State Street Markets, said Wednesday at the Federal Reserve Bank of New York's foreign exchange market structure conference. "We estimate that US domestic investors have halved their hedge ratios, which has actually contributed to the dollar's weakness. The uncertainty brought by Liberation Day still exists, naturally sparking discussions about de-risking."