Australia has become the canary in the coal mine for the bond reflation trade and yield-curve control.
Improving economic data and an 80 basis point surge in 10-year Treasury yields have boosted the dollar's appeal.
The moves came after Fed Chair Jerome Powell indicated he wasn’t concerned over the recent surge in long-term yields.
The growing debate over the global inflation outlook is dividing investors into two camps.
Optimism about a recovery has turned into fears of an overheating economy triggering sooner-than-expected rate hikes.
Concern over supply hitting the market is adding to fears inflation is set to accelerate.
It would be easy for markets to get too optimistic about the end of the pandemic, Pimco's Robert Mead said.
Investors are already doubling down on wagers that stand to profit if the currency weakens further.
The tumble is part of a broader move across financial markets to price in brighter growth prospects for 2021.
At issue is whether the jump in yields is accompanied by an economic recovery.
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