Dollar gains as Treasury yields top 5%, Aussie slides after RBA hike
TLT•The dollar rose as the 10-year Treasury yield settled above 5%, while the Australian dollar fell after the Reserve Bank of Australia raised its cash rate to 4.60%. Investors awaited U.S. inflation and payrolls data for clues on the Federal Reserve’s rate path.
1. Dollar strengthens
The dollar rose against major currencies as investors positioned for economic data that could offer clues on the Federal Reserve’s interest-rate path, with Treasury yields near multi-year highs. The 10-year Treasury yield settled above 5%, and the dollar index gained 0.2% to 101.39, its highest level since July 28.
2. Australian dollar falls
The Reserve Bank of Australia raised its cash rate to a 15-year high of 4.60% in a unanimous decision, saying inflation was too high and it was prepared to raise rates further if needed. The Australian dollar fell to its lowest in nearly two months and was last down 0.36% at $0.6989.
3. Data in focus
Investors were awaiting the August Personal Consumption Expenditures index on Wednesday and September nonfarm payrolls on Friday. Markets saw a near 70% chance of a Federal Reserve rate hike at the end of October.
