Hedge funds are betting that the dollar still has further to rise after big gains this year, propelled by the US Federal Reserve’s determination to curb inflation with tighter monetary policy.

Hedge funds are running more wagers on the greenback advancing against the Canadian dollar, Japanese yen and euro than they are on it falling, according to data from the US Commodity Futures Trading Commission. Brevan Howard, one of the world’s biggest macro funds, is among the firms that have been betting on dollar strength, according to a recent investor letter.

Such trades come even as the US currency has climbed 18 per cent against a basket of six peers already this year, putting it on course for its biggest annual gain on record on the back of rising interest rates and a darkening economic outlook.