Aussie Dollar Traders Boost Bearish Bets Eyeing 2022 Low
Traders are ramping up bearish positions on the Aussie dollar as economic data weakens and US tariffs loom.
Aussie Dollar, Traders, US Tariffs, Economic Data, Sydney, Australia
Sydney: Traders are really betting on the Aussie dollar to drop, aiming for levels we haven’t seen since 2020. Economic data isn’t looking great, and the threat of more US tariffs is making things worse.
On Wednesday, trading volume for the Aussie against the US dollar hit a three-week high. The currency was just above 0.6170, which is close to its low from 2022. A lot of the trades were put options, which are a bet that the Aussie will fall.
Some big trades were made with strikes at 0.60 and lower, with over a billion Aussie dollars changing hands. It seems like traders are getting more bearish, with short positions hitting their highest since March 2022.
Con Davelis from National Australia Bank mentioned that there’s been a noticeable uptick in FX option activity. He noted that the market feels like it’s responding to typical importer and exporter demands.
If the Aussie breaks below 0.6170, it could lead to even more selling pressure. The currency had dropped to 0.5510 back in March 2020, so there’s a bit of history here.
Right now, the Aussie is facing pressure from multiple angles. A recent drop in inflation has traders thinking the Reserve Bank of Australia might cut interest rates soon. Plus, disappointing retail sales data isn’t helping the situation.
And let’s not forget about the looming US tariffs under President-elect Donald Trump, which are adding to the uncertainty. The US payroll numbers coming out later could also impact the Aussie, especially if they show strong growth.
Some strategists at Macquarie Bank even think the Aussie could slide to 60 cents if things go south, like a global trade war or inadequate stimulus from China. It’s a bit of a wild ride right now!
[rule_2]