Australian dollar hits 10-month low as US yields keep climbing
TLT•The Australian dollar fell to $0.68, after touching $0.6798 overnight, its lowest since late January. Higher US Treasury yields, rising bets on a Federal Reserve rate hike, falling commodity prices and fading support from Australian yields weighed on the currency.
1. Aussie nears 10-month low
The Australian dollar slipped 0.1% to $0.68 on Friday after falling as much as 0.6% overnight to $0.6798, its lowest level since late January. It broke support at $0.6835, with $0.67 in focus, and was down 0.8% for the week.
2. US yields and rate bets
The US dollar hovered at its highest level since April last year as Treasury yields rose. Markets put the probability of a 50-basis-point Federal Reserve rate increase next month at 15%, up from 12% a day earlier. Australia's two-year government bond yield premium over US Treasuries narrowed to 3 basis points, from 36 basis points last week.
3. Other currency pressures
The Aussie also faced pressure from expectations that the Reserve Bank of Australia is done tightening, falling copper prices and a stock-market selloff triggered by upheaval at Nvidia. The New Zealand dollar eased 0.1% to $0.5543, near a 19-month low of $0.5529; the Reserve Bank of New Zealand is widely expected to raise rates by a quarter-point in December to 3%.
