Currency traders surged into dollar call options after the Fed policy signaled higher rates. Hedge funds and leveraged accounts bought calls that profit from a stronger greenback, riding fresh hawkish comments from new Fed chair Kevin Warsh. Bank of America’s Tobias Jungmann said the low implied volatility makes long‑dollar bets especially attractive.

Data from CME showed call volume versus the pound more than five times put volume, while DTC reported euro‑linked calls worth $229 million surged to the highest since March 3, outpacing comparable puts by nearly double. Barclays’ James Swindell noted strong demand across EUR/USD and GBP/USD, both vanilla and digital structures.

The Bloomberg Dollar Spot Index climbed about 1% as markets priced in a quarter‑point Fed hike by October. Treasury futures spiked, reflecting bets on further rate rises. By contrast, USD/JPY positioning remained split, with traders wary of possible intervention after Japan’s finance minister warned of bold action. The broad call‑option rally underscores heightened betting on a sustained dollar rally.

Investors eyeing currency exposure may need to hedge against further dollar strength, while yen‑linked strategies could face volatility if Tokyo steps in. The surge signals a shift toward rate‑driven forex plays.