Australian Dollar Under Pressure Ahead of Fed Decision
The Australian dollar steadied around $0.71, holding its recent decline near a four-week low as a firmer US dollar and higher Treasury yields weighed on the currency ahead of the Federal Reserve’s policy decision. The greenback strengthened as markets widely expected the Fed to raise interest rates by 25 basis points, its first increase in around three years, while the US 10-year Treasury yield climbed above 5%, its highest level since 2007, as surging oil prices and persistent inflation concerns reinforced expectations for tighter policy. Oil prices held near a four-month peak above $105 a barrel after fresh Houthi attacks on Saudi Arabia and the postponement of Gulf-Iran talks. Domestically, the Reserve Bank of Australia’s hawkish stance continues to provide some support, with markets pricing an 85% probability of a rate increase to 4.60% at its September 29 meeting. Investors now await comments from Governor Bullock, which is scheduled to appear before Parliament on Friday.
71, holding its recent decline near a four-week low as a firmer US dollar and higher Treasury yields weighed on the currency ahead of the Federal Reserve’s policy decision. The greenback strengthened as markets widely expected the Fed to raise interest rates by 25 basis points, its first increase in around three years, while the US 10-year Treasury yield climbed above 5%, its highest level since 2007, as surging oil prices and persistent inflation concerns reinforced expectations for tighter policy. Oil prices held near a four-month peak above $105 a barrel after fresh Houthi attacks on Saudi Arabia and the postponement of Gulf-Iran talks. 60% at its September 29 meeting.
Investors now await comments from Governor Bullock, which is scheduled to appear before Parliament on Friday.