Market wrap: Aussie retains the bid - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The NZD and AUD made further gains overnight, the former outperforming against a backdrop of rising dairy prices. The Bank of Canada remained on hold as expected.

Interest rates: US 10yr treasury yields slipped from 1.54% to 1.52% - a three-week low - while 2yr yields slipped from 0.74% to 0.72%. Market pricing of the Fed funds rate was little changed, implying around a 20% chance of a rate hike in September, a 60% chance by December, and 100% by August 2017.

Currencies:  The US dollar index probed slightly lower. EUR eked a sideways range of 1.1229-1.1271. USD/JPY consolidated above the recent 101.21 low to 101.83. AUD probed higher, to 0.7698 – a three-week high. Outperformer NZD extended its run to 0.7486 – a 15-month high – which must partially be related to the month-old surge in dairy prices. AUD/NZD broke down to 1.0264 – a 15-month low – before steadying around 1.0300."