The chatter in the professional market is that most of the big macro hedge funds have had a pretty flat year performance wise and the big question now is whether they make a big play towards year-end or simply batten down the hatches and start anew in 2013. The big play earlier in the year was of course the EUR short, and there are still some sizable outstanding shorts in the market. The more recent play has been to short the AUD but this effort also seems to be running out of momentum. My contacts in hedge-fund sales are of the view that the big macros will not be making any more big year-end plays and will reduce positioning from now to year’s end. If that’s the case, expect EUR/USD to move towards 1.3500 and the EUR crosses to also appreciate. It should also mean that the AUD/USD fall is arrested and it moves back towards range highs near 1.0600.
