Australian Dollar Shorts Fall to 2025 Lows as Trump Criticism Hits US Sentiment

Highlights:

• Net shorts on the Australian dollar fell to -5,000, the lowest in 2025.
   
• Hedge fund bearish positions also declined slightly to -22,600.
   
• The Aussie touched a year-to-date high of US64.39¢ on April 22.

Net Shorts Tumble to Lowest Level in 2025

Net short positions against the Australian dollar have dropped to their lowest level this year, as investor sentiment toward US assets weakened following fresh criticism of the US Federal Reserve by former President Donald Trump. According to the latest data, asset managers slashed their net shorts on the Aussie to just -5,000 contracts in the week ending April 22, down from -12,000 the previous week. This marks the fourth consecutive week of declining bearish bets and the most bullish stance since October 2024.

Hedge Funds Ease Bearish Bets

Hedge funds also slightly reduced their short positions, with contracts down to -22,600. This cautious shift suggests that speculators are gradually re-evaluating their views on the Australian dollar’s trajectory, possibly expecting more volatility in US monetary policy amid political noise ahead of the upcoming election season.

Aussie Rallies Despite Broader Currency Weakness

The Australian dollar climbed to a year-to-date high of US64.39¢ on April 22. At the time of writing, however, it remained one of the weaker performers among major currencies that week, indicating that while bearish sentiment has eased, broader investor confidence remains somewhat muted.

Looking Ahead

Market watchers are now keeping a close eye on developments from the US Federal Reserve and upcoming economic data in both countries. A sustained shift in US monetary policy expectations could fuel further gains in the Aussie, especially if China—Australia’s largest trading partner—shows signs of stronger economic growth.

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