PERTH: The Australian dollar has slumped after the US Federal Reserve struck a more hawkish tone than the market expected at its rate-setting meeting overnight.
At 7am on Thursday, the currency was trading at US70.97c, down from US71.20c on Wednesday.
Over the past 24 hours, the local unit has seen a high of US72.09c and a low of US70.79c.
The US central bank’s statement from its latest two-day meeting was largely similar to prior policy updates, but a slight tweak to one sentence made it clear the Fed had not yet ruled out a rate hike this year.
The statement said labour market and inflation indicators would be closely monitored to determine whether a move on rates would be required at its “next meeting”. Previous updates have not identified any specific meeting in regards to lift-off timing.
“They kept December live. They’re less concerned about the global economic environment and they upped their view of domestic drivers,” ANZ senior FX manager Sam Tuck said.
