The Australian dollar is sitting tight today in afternoon trade 3.05pm(GMT) as the market awaits the latest interest rate decision from the US Federal Reserve followed by the accompanying monetary statement.

No changes in rates are expected but the tone of the speech will be closely monitored for signs when the fed plans to hike rates with some analysts predicting that the first move may come in September.

The Aussie dollar has been flirting with 6 year lows for most of the past week as the fall in commodity prices and the mini crash in the Chinese stock market take its toll on the currency.

We believe that the decline in Australia’s biggest commodity, Iron ore is not over and will put further pressure on the Australian dollar, which should see it drift back under the US72c mark.

But for the rest of the day the local currency is in the hands of US Fed President Janet Yellen as she gives her take on the US economy.