Hedge Funds Face Showdown on Aussie as Gold, RBA Risks Collide

The Australian dollar’s outlook is increasingly at risk as a slide in precious metals works against optimism driven by expectations for higher interest rates.

The currency’s pullback from an almost three-year high set last week is casting doubts about whether hedge funds may be wrongly positioned with their bullish bets at the highest levels since December 2017. That stance looked sound enough last month when the Aussie jumped 4.4% amid forecasts for Reserve Bank of Australia tightening and runaway gains in gold and silver.