AUD Hits New Three-Month High as Rate Hike Bets Intensify

The Australian dollar has extended its winning streak to nine weeks, reaching a new three-month peak of $0.7204 as inflation data and interest rate expectations shifted in favor of a rate hike. This marks the longest winning streak since 2010.

The Aussie rose by 0.2% against major peers, with significant gains against the kiwi (up 0.7%), Japanese yen (up 0.8%), and euro (up 0.7%). Bond yields also jumped, with three-year government bond yields increasing to 4.679% and 10-year bond yields reaching 5.098%, their highest since May.

Ray Attrill from the National Australia Bank notes that 'near-term AUD upside risks have increased', but believes the Aussie will likely trade within a range of $0.6850 to $0.7278 for the year due to relative rate expectations.