Investors are buying currency options on the Australian dollar, wagering it will outperform its New Zealand counterpart as global trade tensions ease.
The Australian dollar is rebounding from its lowest level versus the kiwi since February 2024 and may pass through 1.10, according to Westpac Banking Corporation. All of the currency pair’s option trades last week sized at or above notional A$60 million ($38.5 million) on The Depository Trust and Clearing Corporation were call options, a strategy that will be rewarded if the exchange rate rises further.