The Australian dollar is sitting tight today as the market awaits the latest Federal Reserve meeting with the focus on the timing of an interest rate rise.

At 5.23pm (AEDT) the Aussie dollar was trading at US76.11c slightly down from Us76.20 in Yesterdays close.

A growing number of Analysts are now predicting that the US central bank will lift interest rates in June as the US economy gathers momentum, which will mark the first move in 7 years.

Peter Hooper of Deutsche Bank noted that the Fed may drop the word “patient” from their statement, but will still remain neutral and asses the need for an interest rate rise on a meeting by meeting basis,

“The strong consensus is that they will decide to drop the patient language. Janet Yellen made this clear in a testimony some weeks ago” he said

Although the tone of the meeting may be slightly hawkish, Inflation is still causing a headache for the Fed as slow wage growth, lower oil prices and a strong US dollar, which makes imported goods for American consumers cheaper, create a fear that prices may fall even further.

 “It does open the door also to a rate hike this summer - either June or September. However, Janet will say so in the press conference tomorrow that this opens the door for June, but June is not necessarily the most likely, they need to see some more data”. Mr Hooper noted