Forex Flash: AUD/USD is strong play amongst hedge funds – UBS

FXstreet.com (Barcelona) - For the AUDUSD, "hedge funds remain the strongest buyers and have largely driven price action over the past month, with some selective support by private clients. Wealth management flows remain the strongest at present in NOK and AUD, showing that QE fears within this community remain strong and some 'real asset' protection is in strong demand." writes Geoffrey Yu, a Research Analyst at UBS.

However, private clients are not going into the commodity complex at all costs, especially with the looming threat of early normalization from the Fed. The lack of interest in gold points to a need for positive carry on the underlying as well, so we suspect emerging market currencies with commodity exposure also stand to do well in the current environment.