The Australian dollar has fallen to a new four and a half year low after the US central bank issued a more upbeat assessment of the US economy.

At 0700 AEDT on Thursday, the local unit was trading at 81.11 US cents, down from 81.51 cents on Wednesday.

On Thursday morning, it fell as low as 81.07 US cents, after the US Federal Reserve upgraded its economic forecast, saying unemployment will drop to 5.2 per cent.

But the Federal Open Market Committee said it will stay patient before moving to raise interest rates and normalising its easy money stance.

Bank of New Zealand currency strategist, Raiko Shareef, said that although the Fed appears not to have changed its policy stance, the upgrades to the economic forecasts boosted the US dollar because it looks more likely the central bank will hike its interest rate by the middle of 2015.

“This morning, the Fed tried to have its cake and eat it, too, leaving markets slightly confused, if not in outright pain.

“News wires were initially awash with headlines that the FOMC had dropped the ‘considerable time’ phrase with respect to its guidance on interest rates.

“Instead, the FOMC decided it could be patient in beginning to normalise policy.”

AAP