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LONDON — Demand for currency derivatives has shot up this year, data from CME Group showed on Wednesday, in a sign investors are positioning for hefty interest rate hikes from the U.S. Federal Reserve and other big central banks.

“Open interest” — the number of outstanding futures and options — was at $272.5 billion at the end of July, up 8.8% year-on-year, according to CME, the world’s largest financial derivatives exchange.

Large open interest positions reached a record high of 1,312 contracts in May, easing to 1,192 in July, CME said in a release seen by Reuters.

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The rise was attributed to financial markets bracing for aggressive monetary tightening as central banks try to curb the biggest inflation surge in decades, the Chicago-based CME said.

May’s open interest surge came just ahead of the Fed’s 75 basis points (bps) interest rate rise in June.

The U.S. central bank also raised rates by 75 bps in July — a month when the Bank of Canada also delivered a 100 bps increase and the European Central Bank kicked off its first monetary tightening cycle in more than a decade with a 50 bps move.

CME Group senior economist Erik Norland said “conditions are ripe for larger-than-expected (rate) increases, which market participants are clearly preparing for.”

Currency markets have witnessed big moves in recent months, with the dollar index, for instance, rising 6.6% in the April-June period, the biggest quarterly gain since end-2016 .

Average daily trading volumes in CME currency futures was 32% higher in July versus year-ago levels, CME data showed, led by a jump of around 43% in euro futures and roughly 60% in yen. (Reporting by Dhara Ranasinghe; editing by Sujata Rao and Jane Merriman)