Some of the bigger FX hedge funds have not had a great year and with only 3 months left, they are very keen to find that elusive trade which will save their bonuses. I’m hearing from one of the biggest prime brokers that short AUD might well be the trade of choice with USD, EUR, and GBP seen as the likely counter currency. I mentioned earlier this morning that an ex hedge fund and interbank prop trader is starting to build a GBP/NZD long position and it would not surprise me if he is talking to exactly the same people that the PB is speaking with. The market is still slightly long of AUD overall and there’s a long way to go before it can get itself to significant short positions so if you’re a medium term AUD bear, now would seem to be the time to start building.
