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ASX to slip early after Fed’s forecast

Shares are tipped to slip early on the Australian stock market after the US Federal Reserve projected a more sluggish recovery than investors expected.

The local SPI 200 futures contract was down by 66 points, or 1.08 per cent, to 6,063.0 at 0800 AEST on Thursday, indicating losses in share values early.

Investors will be hoping the market can overcome an early downturn and produce an eighth consecutive day of gains.

In the US overnight, policymakers at a two-day meeting of the Reserve projected a 6.5 per cent decline in gross domestic product this year and a 9.3 per cent unemployment rate at year’s end.

The Fed’s pledge to keep monetary policy loose until the US economy is back on track repeats a promise made early in the central bank’s response to the coronavirus pandemic.

The Dow Jones Industrial Average fell 282.31 points, or 1.04 per cent, to 26,989.99, the S&P 500 lost 17.04 points, or 0.53 per cent, to 3,190.14 and the Nasdaq Composite added 66.59 points, or 0.67 per cent, to 10,020.35.

In Australia, the benchmark S&P/ASX200 index on Wednesday closed up 3.5 points, or 0.06 per cent, at 6,148.4 points.

The All Ordinaries closed up 6.4 points, or 0.1 per cent, at 6,269.3 points.

The Australian dollar was buying 69.95 US cents at 0800 AEST, the same value as at the close of trade on Wednesday, , after hitting an almost one-year high of 70.64 US cents earlier in the morning.

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