Australian dollar pressured as US rate hike looms
FIBO Group | Dec 18, 2014 02:32AM ET
The Australian dollar hit another fresh four year low yesterday after a change of tone from the US Federal Reserve indicating that the central bank may lift interest rates in April of next year.
At 4.30pm (AEDT) the Australian dollar is trading at US81.32 cents after falling as low as US81.06 cents in yesterday’s trade.
Since the beginning of the year the Fed has taken the stance that rates will be on hold for "considerable time" after the end of their stimulus program they began several years back to kick start the economy.
They pointed to the employment market and Inflation by noting,
“if incoming information indicates faster progress toward the committee's employment and inflation objectives than the committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated,”
The unemployment rate in the US stands at 5.9%, its lowest level in 12 years.
When pressed on the exact timing of an Interest rate rise, and what she meant by a couple, Fed Chair Janet Yellen told a news conference "So, a "couple," I believe, the dictionary probably says a "couple means two” Which now has analysts pricing in a rate hike in April after two more Fed meetings.
CPI numbers from the US came in at 1.7% yesterday against analysts’ expectations of 1.6% and well below the Fed’s target of 2%.
“This may be one of the reasons for the Federal Reserve to hold off lifting rates a little longer if Inflation continues to underperform” noted analysts from Fibogroup forex brokers
“If the oil price continues to drift lower this may also have an impact on the rate decision as consumers will have more money in their pockets at the end of the day which means less pressure on Inflation”
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.