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Forex

Aussie steady, kiwi moves higher ahead of Fed

Australian dollar

The Australian dollar held steady against its U.S. counterpart on Wednesday, while the New Zealand dollar moved higher as investors were awaiting the Federal Reserve’s highly-anticipated policy decision later in the day.

AUD/USD was little changed at 0.7496, just off the previous session’s one-month high of 0.7523.

The Fed is widely expected to hike rates for the first time in a year on at the conclusion of its meeting later Wednesday.

The U.S. central bank will also announce updated economic forecasts and markets will be watching closely for signals on the outlook for inflation and the expected pace of rate hikes in 2017.

Investors remained wary amid concerns that the Fed could strike a cautious tone on the outlook for policy tightening next year.

Higher rates boost the dollar by making the currency more attractive to yield-seeking investors.

NZD/USD rose 0.21% to trade at 0.7219, not far from Tuesday’s one-month peak of 0.7232.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.19% at 100.90.

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Paul

The author Paul