The Australian government bonds plunged Wednesday, tracking softness in U.S. Treasuries after the Federal Reserve Chair Janet Yellen presented a hawkish testimony before the Senate Banking Committee. Also, investors are awaiting the country’s employment report, scheduled to be released on Thursday.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 5 basis points to 2.80 percent, the yield on 15-year note also surged 5 basis points to 3.24 percent and the yield on short-term 2-year rose 3 basis points to 1.87 percent by 04:00 GMT.

"Ongoing gains in the labor market have been accompanied by a further moderate expansion in economic activity. U.S. real gross domestic product is estimated to have risen 1.9 percent last year, the same as in 2015. Consumer spending has continued to rise at a healthy pace, supported by steady income gains, increases in the value of households’ financial assets and homes, favorable levels of consumer sentiment, and low interest rates," Yellen said in her prepared testimony.

Further, her comments remained more hawkish than what markets had anticipated, further signalling monetary policy tightening in the near term.

"My colleagues on the FOMC and I expect the economy to continue to expand at a moderate pace, with the job market strengthening somewhat further and inflation gradually rising to 2 percent. That said, the economic outlook is uncertain, and monetary policy is not on a preset course," she added.

Meanwhile, the ASX 200 index traded 0.45 percent higher at 5,752.50 at 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bullish at 164.05 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex