Hedge funds ramp up dollar call options after hawkish Fed signal, with GBP and EUR volumes jumping
Hawkish signals from the Federal Reserve have reinforced expectations for higher U.S. interest rates. Hedge funds quickly added bullish dollar options against the pound and the euro, with USD/GBP call volume running at more than five times puts and large (≥€200 million) USD/EUR calls hitting their highest volume since March 3, data show. Positioning in dollar-yen was more balanced as markets weighed the risk of Japanese official intervention to support the yen.