The Australian dollar has tumbled more than one US cent after the latest monetary statement from the Federal Reserve. Today the local currency is trading at around US87.70 cents down from a high of US89.10 in yesterday’s trade.
The US central bank mentioned that it was happy with the recent strength of the labor market and brushed off fears of low inflation and a slowdown in the global economy. The American economy has added a monthly average of 200,000 thousand jobs this year showingrobust growth and at least from an employment point of view a strengthening economy.
Westpac senior market strategist in Wellington Imre Speizer said the Fed now seemed more willing to raise its interest rate than in previous meetings.
“The US Federal Reserve surprised the market, boosting the US dollar,” he said.
“A key change was its assessment that the labour market had improved.”
The bank reiterated that it will not raise the Federal Fund rate for a “considerable time”, but a key change was that it said that was conditional on incoming information, Mr Speizer said.
The Fed has kept to its word and decided to wind up its economic stimulus program at the end of October. The phasing out of the program began in January of this year by reducing the amount of purchases for treasuries and mortgage backed securities by $10 billionafter each meeting.
The US central bank mentioned that it was happy with the recent strength of the labor market and brushed off fears of low inflation and a slowdown in the global economy. The American economy has added a monthly average of 200,000 thousand jobs this year showingrobust growth and at least from an employment point of view a strengthening economy.
Westpac senior market strategist in Wellington Imre Speizer said the Fed now seemed more willing to raise its interest rate than in previous meetings.
“The US Federal Reserve surprised the market, boosting the US dollar,” he said.
“A key change was its assessment that the labour market had improved.”
The bank reiterated that it will not raise the Federal Fund rate for a “considerable time”, but a key change was that it said that was conditional on incoming information, Mr Speizer said.
The Fed has kept to its word and decided to wind up its economic stimulus program at the end of October. The phasing out of the program began in January of this year by reducing the amount of purchases for treasuries and mortgage backed securities by $10 billionafter each meeting.
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