The Australian dollar has recovered today finding strong resistance at US76c mark as investors ponder the US Federal Reserve’s stance on interest rates for the rest of the year.
At 15.00 (AEDT) the Aussie dollar was trading at US76.28c up from a low of USUS75.83c in yesterday’s trading.
The Australian dollar had been under pressure since the weekend after a speech by Federal Reserve Vice Chairman Stanley Fischer who said that the US economy was a track and a rate hike by the FED before the end of the year was very possible.
The market currently sees a 40 percent chance of a rate hike this year and some like analysts at ANZ bank predict that the Fed may not move before the end of the year
While we continue to think that the fundamental grounds for a rally are not in place, market volatility has not provided the catalyst for weakness that we anticipated," the bank said.
"We cannot identify near-term drivers of a significant depreciation," it added.
They also noted that the Aussie dollar won’t rely on any key indicators for further growth but would be dictated by other factors,
"This outlook for both the domestic economy and key commodity sectors means any further appreciation in the Australian dollar is likely to be driven by global liquidity and risk appetite factors, rather than anything fundamental," ANZ said.
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