Hedge Funds Load Up on Aussie Call Options in Run-Up to RBA (1)

Hedge funds are ramping up bullish bets on the Australian dollar in the options markets before next week’s central bank decision.

The volume of call options that wager on gains in the Aussie versus its US peer climbed to six times that of puts on Wednesday, according to Chicago Mercantile Exchange data. The amount remained more than triple that on Thursday, despite drifting lower. The surge comes as three of Australia’s “Big Four” lenders expect the central bank to raise its cash rate by a quarter percentage point on March 17.

“We are seeing renewed demand from macro hedge funds ...