Investing.com - The Australian dollar has seen a slight increase, reaching US$64.6 on Monday, following a 0.8% lift last week - the first in seven weeks of decline. This rebound is largely attributed to predictions that the U.S Federal Reserve will halt its interest rate hikes as well as China's robust support for its faltering economy.
Meanwhile, Australia’s 3-year government bond yields have seen an increment to 3.76%, with the 10-year yield jumping from below 4% to 4.06%. The bond markets indicate no expectation of any change in interest rates as the Reserve Bank of Australia (RBA) board members prepare for their final cash rate decision under Governor Philip Lowe.
Current market sentiments offer only a one-in-three chance that the RBA will raise cash rates further this cycle, potentially peaking at around 4.35%. However, by December next year, it's predicted that there could be a 25 basis point reduction in cash rates - something almost fully factored into today's bond prices.