Aussie Dollar Slumps as Bond Yields Reach New Heights Amid US Rate Hike Fears

The Australian and New Zealand dollars took a hit on Tuesday as investors priced in an imminent US rate hike. The Aussie dollar remained pinned at $0.7135, while the kiwi dollar idled at $0.5778.

Australian 10-year yields surged to fresh 15-year highs, increasing by 11 basis points to 5.394%. Yields on New Zealand's 10-year paper climbed 24 basis points in two sessions to reach 5.043%, levels not seen since late 2023.

Data released on Tuesday showed electronic retail card spending fell a sharp 0.9% in August, hit by higher petrol prices and borrowing costs. Economists pointed out that household spending growth is likely to remain gradual due to soft labour markets and high living costs.