The Australian dollar nursed a second session of heavy losses early on Wednesday as investors unwound popular carry trades amid a pick-up in market volatility and further gains in U.S. Treasury yields.
Standing out from the other major currencies, the Aussie fell 0.9 percent on Tuesday, following on from Monday’s 1.0 percent drop. It slid to its lowest in over five months at $0.9188, before edging back to $0.9210.
The Aussie’s setback was sparked by a broad rally in the U.S. dollar. Investors seemed to be repricing the risk of an earlier U.S. interest rate hike after interpreting a Federal Reserve study as suggesting they were underestimating such a move.