AUD Steadies Near Six-Month High on Hawkish RBA Bets

The Australian dollar has held firm near its fresh top as investors bet on a near-term interest rate hike, pushing short-term bond yields to their highest in almost six months.

A string of hawkish comments from the Reserve Bank of Australia (RBA) and rising oil prices have seen markets price in an 80% chance of a rate rise later this month.

Bond markets reacted by lifting 3-year yields 8 basis points to 4.905%, threatening a break above the March spike top at 4.905%.

JPMorgan analysts wrote that RBA commentary suggests 'something has shifted', pushing the board into risk management mode, and expect a 25bp hike for the September meeting to 4.60%.