(Bloomberg) – Leveraged funds’ dovish stance against the Australian dollar will be tested after US inflation data supported prospects of a stronger currency.

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The Aussie rallied bullishly to a near 8-week high of 67.17 cents last week, helped by weaker CPI numbers that questioned how far the Federal Reserve needs to hike rates. This is bad news for hedge funds, which were net short 27,293 contracts last year.