According to Bloomberg market analysis, hedge funds betting for the Australian dollar’s decline, amid expectations that a slowing economy will trim the currency’s gains, are feeling the squeeze from the OZ currency’s 27% from 18-year lows hit in mid-March.
Key takeaways
“The Reserve Bank of Australia refrained from talking down the currency last week, fueling further gains.
Patience is running thin as trade tensions with China, the biggest importer of Australian commodities, did little to damp the Aussie’s strength.
Technical data, however, is offering solace to these hedge funds as the currency pair failed to breach initial resistance at a December high of 0.7032 last week.
According to Commodity Futures Trading Commission data, hedge funds held short positions in excess of 15,400 contracts as of June 2, the largest in two months.”
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