Key AUD prop – Aust pension funds enhance hedging of US belongings over coverage uncertainties

Bloomberg (gated) have a bit up: Hedging by Australia’s Pension Funds Set to Increase Native Greenback

Bloomberg is gated, however in short it discusses how t e Australian greenback (AUD) is anticipated to proceed rising, supported by elevated foreign money hedging exercise from main Australian pension funds.

These funds, with vital publicity to offshore belongings, play a key position in driving demand for the native foreign money.
One of many foremost drivers behind the shift is the rising threat of world tariffs and expectations that the U.S. Federal Reserve will reduce rates of interest, each of that are more likely to weaken the U.S. greenback. In response, Australian superannuation funds could step up hedging of their U.S. holdings, which might improve demand for the AUD.

It additionally collates some analysts views citing the above reasoning. Once more, in short:

• NAB’s Ray Attrill forecasts the AUD might rise almost three% by year-end
• Citigroup notes AUD/USD is effectively supported above zero.64
• Deutsche Financial institution maintains a year-end AUD/USD goal of zero.67

This text was written by Aaron Cutchburt at investinglive.com.