Australian Dollar/U.S. Dollar and Australia Yield Curves
This pair has opposing configurations, therefore as Australian dollar/U.S. dollar rises along with U.S. bond yields, it drops as Australia's bonds fall. In this instance, Australian dollar is tied to U.S. yields during U.S. market trading and the U.S. dollar is tied to Australia's bond yield during Australia trading. For further confirmation, one only has to look at LIBOR or Bank Bills. We follow yields in the United States and bond prices in Australia for direction and continuity as Australia trading ends and trade shifts to the next market. What to look for in yield curves is a widening and narrowing of spreads.
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