Australian Dollar Pauses Near Multi-Month Highs Amid Global Bond Selloff

The Australian and New Zealand dollars have paused near multi-month highs due to a global selloff in bonds, which has kept investors cautious.

Australian 10-year bond yields have spiked by 9 basis points to a five-month top of 5.166%, while 3-year futures have slid by 7 ticks to 95.280.

The Reserve Bank of Australia is expected to hike rates a quarter point to 4.60% at its meeting on September 29, with markets implying a 54% chance of this happening, up from just 10% a week earlier.

Paul Bloxham, head of Australian economics at HSBC, argues that the RBA has 'no easy choices' and faces a difficult decision if the GDP growth print is weak or strong.