Aussie Dollar Under Pressure as Markets Anticipate US Rate Hikes

The Australian and New Zealand dollars have been under pressure as markets anticipate an imminent US rate hike and further tightening by other central banks.

Australian 10-year yields spiked 11 basis points to 5.394%, a 60-basis-point increase for the year so far, while New Zealand's 10-year paper climbed 24 basis points in two sessions to reach 5.043%, its highest level since late 2023.

Short-term swap rates have surged, tightening financial conditions in the economy at a time when the Reserve Bank of New Zealand has been sounding dovish about further hikes in its cash rate.

Data released on Tuesday showed electronic retail card spending fell by 0.9% in August due to higher petrol prices and borrowing costs.