The Australian dollar exchange rate continues to soar, hedge funds take advantage of the trend by increasing bullish bets.

Amid the continued strength of the Australian dollar exchange rate, macro hedge funds are increasing their bets on its appreciation potential. Traders revealed that several fund companies have recently increased their holdings of Australian dollar call option contracts, which will profit as the Australian dollar continues to strengthen against major currencies. Data from the Depository Trust & Clearing Corporation (DTCC) in the United States showed that last week, the Australian dollar against the US dollar options had the most active two trading days since the end of July. During these two days, the volume of call options trading reached three times that of put options, with frequent trades of $150 million Australian dollars (approximately $100 million USD) and above. At the same time, the Australian dollar against the US dollar exchange rate also reached its highest level since November of last year. Ivan Stamenovic, G-10 foreign exchange trading director for Bank of America in the Asia-Pacific region, stated: "As the macro investment community seeks to accumulate positions to cope with potential breakouts in the Australian dollar, we see a continued increase in market demand for call options of the Australian dollar against other currencies." The Australian dollar was the second best-performing major currency in September, second only to the Norwegian krone. Macro funds are betting that the excellent performance of the Australian dollar will continue in the coming weeks due to multiple factors driving its strength, including resilient domestic household spending in Australia, better-than-expected economic growth, rising commodity prices, and hawkish signals from the Reserve Bank of Australia. Earlier this month, RBA Governor Michelle Bullock stated that strong consumer demand may limit room for interest rate cuts. The bets of macro funds on the Australian dollar are not only against the US dollar. Currently, the Australian dollar against other G-10 currencies has also climbed to multi-month highs. Due to weak Canadian economic growth and soft labor data, the Australian dollar against the Canadian dollar exchange rate reached its highest level since November of last year. These data have led traders to raise expectations of a 25 basis point rate cut by the Bank of Canada at its meeting on September 17. DTCC data showed that on one of the most active days of Australian dollar options trading last week, all transactions exceeding $50 million Australian dollars in the Australian dollar against Canadian dollar exchange rate were call options. Additionally, after Swiss National Bank President Martin Schlegel signaled that he would not hesitate to lower interest rates below zero if necessary, the Australian dollar against the Swiss franc exchange rate also hit a new high since mid-June. Troy Fraser, Director of Foreign Exchange Sales for Australia and New Zealand at Citibank in Sydney, stated: "In the past two weeks, we have seen hedge funds expressing their bullish views on the Australian dollar against the US dollar through call options. Meanwhile, the currency pairs of the Australian dollar against the Canadian dollar and the Australian dollar against the Swiss franc have also become popular choices in the market for expressing bullish views on the Australian dollar."