What is a basket of USD shorts?

A basket of USD shorts is where a trader sells USD against a group of currencies. Traders do this to reduce the risk of their trade.
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A basket of USD shorts is where a trader sells USD against a group of currencies.

Traders do this to reduce the risk of their trade. By selling USD against a group of currencies, a trader reduces their market exposure should USD appreciate in value.

Remember, USD will appreciate at different rates against other individual currencies. By grouping those individual currencies together, traders can limit their losses should the market move against their position.

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