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Forex - AUD/USD climbs to nearly 3-week highs after Fed statement

Published 28/01/2016, 06:32 pm
Aussie climbs higher against greenback as Fed disappoints
AUD/USD
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AUD/NZD
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Investing.com - The Australian climbed to nearly three-week highs against its U.S. counterpart on Thursday, as disappointment caused by the Federal Reserve’s latest policy statement dampened demand for the greenback.

AUD/USD hit 0.7063 during late Asian trade, the session high; the pair subsequently consolidated at 0.7057, advancing 0.44%.

The pair was likely to find support at 0.6988, Wednesday’s low and resistance at 0.7081, Wednesday’s high and a three-week high.

As expected, the Fed kept interest rates unchanged at the conclusion of its policy meeting on Wednesday and said the U.S. economy was still on track for moderate growth.

The greenback came under mild pressure however, as the U.S. central bank gave no indications on the pace of future interest rate increases.

In Australia, data on Thursday showed that import prices fell 0.3% in the fourth quarter, compared to expectations for a 0.8% decline and after an increase of 1.4% in the three months to September.

The Aussie was higher against the New Zealand dollar, with AUD/NZD edging up 0.11% to 1.0941.

Earlier Thursday, the Reserve Bank of New Zealand held its benchmark interest rate at 2.50%, in a widely expected move.

However, RBNZ Governor Graeme Wheeler said headline inflation will take longer to get back into the central bank's target between 1% and 3% than previously estimated, and that further rate cuts may be needed.

At the same time, Statistics New Zealand reported that the trade deficit narrowed to NZ$53 million in December from NZ$799 million in November, whose figure was revised from a previously estimated deficit of NZ$779 million.

Analysts had expected the trade deficit to narrow to NZ$131 million last month.

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