Big stock market gains and ultra-low volatility are forcing hedge funds to look outside of equity and bond markets for returns, and they are taking bigger and riskier bets on foreign exchange markets.

Unexpected rises in the euro and the US dollar’s weakest year since 2003 made 2017 a year to forget for some macro managers — funds that base trading decisions on macroeconomic trends — who have struggled to produce returns in recent years. The average macro manager generated a cumulative return of just 2% in the three years to January 2018, according to HFR.