Analysts at Westpac explained that the central banks have exhibited a hawkish tilt of late, sending bond yields higher.
"The Bank of Canada raised rates from 0.50% to 0.75%, the first hike since 2010."
"The Bank of England left rates on hold at 0.25%, but 3 of 8 members voted for a hike, up from 1 vote in May."
"The Reserve Bank remains on hold at 1.50% and the Governor delivered a neutral statement. Despite this, markets have priced in a rate hike for 2018. We continue to expect rates to be on hold throughout 2017 and 2018."
"Market pricing for hikes from the RBNZ has risen in recent weeks. This follows signs of firmness in economic activity and the rise in headline inflation back to levels around the mid-point of the RBNZ’s target band. However, we think market pricing for OCR hikes is too early, with low interest rates still a key support for economic conditions. Rising borrowing costs, mirroring the global trend, are having a dampening impact, reinforcing the case for the RBNZ on hold."
"ECB officials suggest the move from deflation to reflation does not signal a near-term shift in the stance of balance sheet or interest rate policy."
"Sentiment towards the Euro Area has remained robust thanks to favourable data and a much-improved political status quo."
"The EUR/USD held near its June highs circa 1.14 in recent weeks."
"While in the US, confidence has wavered, extending US dollar weakness, seeing the DXY down by over 6% from its early March peak."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.