Aussie and Kiwi Dollars Reel as US Yields Surge, Rate Hikes Loom

The Australian and New Zealand dollars have taken a hit this week due to surging US yields that are buoying the greenback. Despite markets narrowing the odds on further rate rises, the Aussie dollar has fallen 1.6% for the week and is now hanging at $0.7010.

This brings it to a seven-week trough, threatening support around $0.6923 and $0.6867. The Reserve Bank of Australia (RBA) is expected to hike by 25 basis points to 4.60% at its meeting on September 29, with some predicting further rate rises in November.

Paul Bloxham, head of Australian economics at HSBC, said 'We expect greater resolve from the RBA to get inflation back to target.'

The kiwi dollar has also suffered, down 1.2% on the week and now fast approaching the 2026 low of $0.5627.