Asset managers’ short positions on the Australian dollar surged to a record high in the week ended Oct. 20, as mounting Middle East tensions and jitters over the artificial intelligence trade spurred a retreat from the risk-sensitive currency.

A rush to unwind yen-funded carry trades helped send the currency to a one-month high against the dollar as traders ramped up bets on further Bank of Japan rate hikes.

Carry traders are increasingly turning to the Swiss franc in the near term for their source of funding as the threat of intervention and higher interest rates saps the appeal of borrowing in the yen.