Commodity Futures Trading Commission data show the most-bullish six-week change to Aussie positions in more than 1 1/2 years over the period to April 22, just in time to catch a slump that made the local dollar the past week’s worst performer among 10 currencies tracked by Bloomberg Correlation Weighted Indexes. Earlier this year, futures traders were forced to abandon near record bets on declines when the Aussie rallied from the 3 1/2-year low reached on Jan. 24.
“The Aussie is in a steady range and, rather typically, short-term money is getting poorly positioned at both ends of the ranges,” said Hugh Killen, Westpac Banking Corp.’s Sydney-based global head of foreign exchange. “The market has got itself long at relatively unattractive levels and we could see a further sell-off as a result.”
The local dollar slid 1.5 percent in the past week against other major peers, the Bloomberg indexes show, after an April 23 report showing subdued inflation eroded bets the central bank will increase rates this year. The currency will probably fall to 88 U.S. cents by year-end from 92.43 cents as of 12:15 p.m. in Sydney, according to the median of forecasts compiled by Bloomberg.
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