Aussie, Kiwi Dollars Fall to Multi-Month Lows Amid US Dollar Strength

The Australian dollar and New Zealand dollar have fallen to multi-month lows due to the strong performance of the US dollar.

The Aussie, which has been declining for four straight weeks, is now down at $0.6920, having slipped 0.2% overnight to hit a three-month trough of $0.6904.

This decline has also led to a sharp downturn in Australian bonds, with the Reserve Bank of Australia raising interest rates to a 15-year high of 4.6% on Tuesday.

However, investors are now skeptical about further rate hikes, with the probability of an October hike at 22% and even a December move put at just 38%.

Australian government bonds have fared relatively better than the currency, with demand helping to cushion them from the fallout in Treasuries. The 10-year yield premium has shrunk to a one-year low of 11 basis points.