AUD/USD fell as the US Dollar recovered following Powell’s words.
The Fed reduced rates by 50 bps to 5%.
Federal policymakers foresee lower GDP development, higher unemployment, and easing inflation in the coming years.
The AUD/USD reached a high of 0.6800 before falling back toward the 0.6760 level in the wake of the Federal Reserve's (Fed) decision to cut interest rates by 50 basis points to 5%. Fed Chair Jerome Powell’s cautious words seem to have made the USD clear most of its daily losses.
On the Aussie’s front, the Australian economy faces an uncertain future with mixed signals from various economic indicators. Despite high inflation, the Reserve Bank of Australia (RBA) has maintained a hawkish stance, indicating a commitment to combating inflation through interest rate increases. As a result, markets now anticipate only a modest easing of monetary policy in 2024, with a potential rate cut of just 0.25%.
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