⚖️💱Yield Differentials Support AUD/USD Higher: Cable FX Macro

• The real driver behind AUD strength is the interest-rate differential. As of April 14, 2026, the 10-year AGB yield sits at approximately 4.93%, while the equivalent U.S. 10-year Treasury yields 4.27%—a spread of roughly +66 basis points in Australia’s favor.

• RBA rate hikes in February and March (lifting the cash rate above the Fed’s for the first time in years) pushed Australian yields higher while U.S. yields remained relatively anchored or eased on growth concerns. The 2-year spread has similarly extended, recently approaching 85 bp. Australian 10-year yields themselves have climbed from 4.77% in February to current levels near 4.92%, reflecting persistent inflation concerns and a more hawkish RBA stance.

• This is not just a short-term blip. The differential has reached multi-year highs, creating a powerful carry tailwind for the AUD. Higher Australian yields attract foreign capital seeking better returns, supporting the currency even in periods of modest risk aversion. Our Quantitative Momentum model for April continues to see the AUD favored despite the U.S.-Iran clash.

• Our view favors longs in AUD/USD while the AGB-UST spread remains elevated or continues to widen. The fundamental setup supports a grind higher toward 0.7200–0.7300 over the coming weeks/months.

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