Hedge funds under pressure to be long Aussie at the wrong time

Hedge funds had reached their highest level of bullishness on the Australian dollar so far this year.

According to the U.S. Commodity Futures Trading Commission (CFTC), in the week ended August 8, leveraged funds’ positions in the Australian dollar turned from net short to net long at 17,432 contracts in the previous week.

But since then, the Australian dollar has continued to decline.

Commonwealth Bank of Australia strategists Kristina Clifton and Carol said AUD/USD could be sensitive to both wage and labor data divergence from expectations, with the RBA now at or near the end of its tightening cycle.

This week’s data may weigh on AUD/USD. The Australian dollar continued to fall on Monday, down 0.43% on the day, last at 0.6467.