Free Subscription

  • Access 15 free news articles each month

Professional

Try one month for $5
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • Exclusive Masterclass access. Part of Retail Week 2021

Dollar loses ground

Dollar, coinThe Australian dollar has dropped more than one US cent after the Federal Reserve issued an upbeat assessment of the American employment market.

The currency fell as low as 87.77 US cents on Thursday morning, after hitting an overnight high of 89.13 cents before the Fed statement was released.

At 0700 AEDT on Thursday, the local unit was trading at 87.80 US cents, down from 88.64 cents on Wednesday.

The statement, issued after the Federal Reserve’s two day policy meeting, said the jobs market had enjoyed “substantial improvement” and the Fed expected its underlying strength to continue.

The Australian dollar has fallen more than 10 US cents in recent months as the US economy improves and the chances of an interest rate hike gets closer.

Westpac senior market strategist in Wellington, Imre Speizer, said the Fed now seemed more willing to raise its interest rate than in previous meetings.

“The US Federal Reserve surprised the market, boosting the US dollar,” he said.

“A key change was its assessment that the labour market had improved.”

The Fed reiterated that it will not raise the Federal Fund rate for a “considerable time”, but a key change was that it said that was conditional on incoming information, Speizer said.

As was widely expected, the US central bank said it will end its economic stimulus program at the end of October.

The Fed has been tapering its bond purchase program from $US85 billion a month last December to just $US15 billion this month.

AAP

westpacGet the fx factor with Westpac’s extensive range of FX services to help your business trade more effectively. Find out more here.

You have 7 free articles.

Webinar is only for Professional subscribers

Become a Professional for only $5 Already member? Login
  • Unlimited access to news,insights and opinions
  • Quarterly and weekely magazines
  • Independent research reports and forecasts
  • Quarterly webniars with industry experts
  • Q&A with retail leaders
  • Carrer advice
  • Exclusive masterclass access.Part of Retail Week 2021