Australian Bonds Drop on Fed Policy, Currency Near 3-Month High

Australia’s bonds fell, pushing 10-year yields to the highest since September, after a Federal Reserve decision to stimulate the economy by expanding Treasury buying crimped investor appetite for safer assets.

The Australian dollar traded near the highest level in almost three months versus its U.S. peer, which tends to be debased by expansionary monetary policy. The Federal Open Market Committee said interest rates will stay low as long as U.S. unemployment remains above 6.5 percent and inflation is in check. The Australian and New Zealand dollars were buoyed as global equities gained and before a private report tomorrow forecast to show Chinese manufacturing is strengthening.