Australian, NZ dollars on edge as markets weigh Fed scenarios

For now, the expectation of a cycle of hikes kept the Aussie pressured at $0.7125 AUD=D3, having eased 0.1% overnight. Support lies at the recent three-week low of $0.71085, with resistance at $0.7149 and $0.7187.

The kiwi dollar sagged to a two-month trough of $0.5740 NZD=D3, after losing another 0.3% overnight. It has now fallen for seven of the last eight sessions and breached support at $0.5762, risking a retreat to $0.5627.

The Aussie also hit a fresh 13-year peak on the kiwi at NZ$1.2392 AUDNZD=R, having climbed 3.3% in the past month.

Markets imply an 85% chance the Reserve Bank of Australia will raise the 4.35% cash rate by 25 basis points when it meets on September 29, and reach 4.85% by early 2027. 0#AUDIRPR

The hawkish outlook has combined with a rout in global debt markets to send 3-year bond futures diving to a 15-year low of 94.875 YTTc1, while 10-year yields have shot up to 5.381% AU10YT=RR.