The National Bank of Denmark published figures showing that Danish insurance companies and pension funds have increased currency hedging of their US dollar investments to 73.5% from 61.8% since the start of 2025, reflecting greater use of financial contracts to protect against a weaker dollar. By end-May 2025, US dollar investments totalled about DKK 1,431 billion, representing 30% of the sector’s investments. Year-to-date investment returns show a loss of DKK 4 billion, with DKK 47 billion in dividends and interest in the first five months of the year offset by DKK 4 billion in negative exchange rate adjustments and a further DKK 47 billion in currency adjustments. The National Bank attributes most of the currency loss in 2025 to a sharp fall in the dollar since the beginning of March and notes that around a quarter of dollar investments remain unhedged, estimating that hedging reduced losses by about DKK 80 billion. Without hedging, the currency loss would have been DKK 127 billion and the total loss DKK 84 billion.
National Bank of Denmark 2025-07-03
National Bank of Denmark reports Danish insurers and pension funds lifted US dollar hedging to 73.5%
The National Bank of Denmark reports that Danish insurance companies and pension funds have increased currency hedging of their US dollar investments to 73.5% from 61.8% since early 2025, amid a weaker dollar. By end-May 2025, US dollar investments totalled approximately DKK 1,431 billion, with hedging reducing potential currency losses by about DKK 80 billion. Despite this, year-to-date investment returns show a loss of DKK 4 billion, mainly due to negative exchange rate adjustments.