Middle East Tensions

Australia's largest pension funds are increasing currency hedging ratios as Middle East tensions threaten sustained volatility in commodity-linked currencies. The move signals institutional money managers expect prolonged rather than short-term disruption from Iran's actions. For UK-based fund managers with exposure to Australian assets, this represents a repricing of currency risk that could affect returns through 2025. The hedging surge also indicates pension funds see the current crisis as fundamentally different from previous Middle East flare-ups.