Aussie and Kiwi Dollars Hold Near Multi-Month Highs Amid Bond Selloffs

The Australian and New Zealand dollars hovered near multi-month highs on September 1 as global bond selloffs kept investors cautious. The selling across debt markets saw Australian 10-year bond yields spike 9 basis points to a five-month top of 5.166 per cent, while 3-year futures slid 7 ticks to 95.280.

Treasuries led the rout due to concerns about US budget deficits and debt levels. Local markets have also come under pressure from expectations that interest rates may need to remain higher for longer to tame inflation.

Markets now imply a 54 per cent chance the Reserve Bank of Australia will hike rates a quarter point to 4.6 per cent at its meeting on September 29, compared with just 10 per cent a week earlier.