Aussie Broken Link With U.S. Yield Spells Drop: Australia Credit

The tendency for the Australian dollar to rise in step with U.S. bond yields has broken down and that signals more declines for the world’s worst-performing major currency.

The 60-day correlation between the Aussie dollar and Treasury yields was -0.42 last week, where a reading of -1 means the two move in opposite directions. That’s the strongest negative link since 2006 and follows a five-year period ending in June in which the assets tended to move together as the outlook for the global economy fluctuated.