Westpac strategists see risks skewed toward even higher yields in the near term, pulling up the dollar as well.
"We expect 10-year yields to establish a new, higher, yield range in coming weeks," with a possible peak around 4.75 per cent, they said."Medium term, we would be looking to get long at some stage, but that time is not yet upon us."Chicago Fed President Austan Goolsbee said on Monday that inflation staying entrenched above the central bank's 2 per cent target remains a bigger risk than tight Fed policy slowing the economy more than needed.
The European Central Bank and Bank of England have also touted higher rates for longer in policy meetings since the middle of the month. The euro sagged 0.05 per cent to US$1.05855, approaching the overnight low of US$1.0575, a level last seen in mid-March.