Speculators looking to profit from the hawkish shift among global central banks have a fresh target: the Australian dollar.
With the pound, euro and Canadian loonie all surging around 2 percent this week after officials signaled a bias toward tightening monetary policy, hedge funds are piling into Aussie options on expectations the Reserve Bank of Australia will follow suit. Implied volatility contracts with a tenor of one week spiked to 8.8750 Friday, the highest since May 5. Speculators added more than $1.7 billion of options on the Australian currency at a strike price of 77 U.S. cents over the past two days, DTCC data show.
