CANBERRA: The Australian dollar is slightly higher after the US Federal Reserve appeared cautious about an interest rate rise this year.
The Australian dollar was worth 77.31 US cents at 1700 AEST on Thursday, up from 77.15 US cents on Wednesday.
The currency performed well after the US Fed chair Janet Yellen failed to indicate that a rate rise is imminent, disappointing the market, National Australia Bank currency strategist Emma Lawson said.
“It’s been a pretty good session,” she said. “We’ve reversed some of our post-FOMC gains but there has been no effective news flow.”
Currency markets are waiting for news on the crisis in Greece and the release of US inflation figures on Thursday night, which will be a factor in the Fed’s next interest rate decision, Ms Lawson said.
At 1700 AEST, the Australian dollar was buying 95.25 Japanese yen, down from 95.33 yen on Wednesday, and 68.20 euro cents, down from 68.54 euro cents.
The bond market rallied, outperforming US Treasuries which rose after the US Federal Reserve’s policy meeting.
“We’ve outperformed the US,” JP Morgan interest rate strategist Sally Morgan said.
“It’s been a very strong rally, helped by the US Federal Reserve, with the market taking comments as more dovish than people had been looking for.”
While the Fed meeting failed to add clarity to the timing or number of rate increases expected in the US this year, the committee did describe US economic growth as “moderate” after the winter slowdown.
At 1630 AEST on Thursday, the September 2015 10-year bond futures contract was trading at 97.105 (implying a yield of 2.895 per cent), up from 96.965 (3.035 per cent) on Wednesday.
The September 2015 three-year bond futures contract was at 98.06 (1.94 per cent), up from 97.950 (2.050 per cent).
