Hedging by Australia’s Pension Funds Set to Boost Local Dollar

The Australian dollar is set for further gains as the nation’s biggest pension funds have reason to boost hedging of their US assets to shield them from policy uncertainties.

Tariff risks and bets that the Federal Reserve will cut interest rates should weaken the greenback, according to Ray Attrill, head of foreign-exchange strategy at National Australian Bank in Sydney. Aussie pension funds may then have to increase currency hedging for their US assets, he said.