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Battered Aussie Could See More Downside as Fed Fuels Dollar Bets
After a painful start to 2022, the options market points to even tougher days ahead for the Australian dollar. A measure of put-and-call-option demand is flashing more bearish signals across tenors for the embattled currency, even as the Reserve Bank of Australia is expected to end its asset-purchase program at a meeting next week. Rising commodity prices -- usually a boon for the currency -- are providing no relief. Money markets expect the central bank to begin lift-off in the first half of the year, and are currently pricing 125 basis points of hikes by end-2022. The Aussie’s woes aren’t unique: All ... (full story)