The Australian dollar has continued to rocket ahead today racking up its 4th straight day of gains after yesterday’s interest rate decision from the US Federal Reserve.
At 5.05pm (GMT) the Aussie dollar was trading at US76.46c up from US76.18c in yesterday’s trading.
In a widely expected move, The US Fed left rates on hold yesterday but in a following monetary speech they noted that a December rate hike remains a real possibility and will be data dependent.
“The FOMC kept interest rates on hold and paved the way for a December rate hike said Elias Haddad, senior currency strategist at the Commonwealth Bank.
The market has now priced in a more than 50 percent chance that the Fed will lift rates before the end of the year, up from 40 percent before yesterday’s announcement.
Also boosting the Aussie dollar is expectations that the Reserve Bank of Australia is done with their rate cutting cycle with some now predicting that the next movement in rates may be upwards.
RBA governor Philip Lowe told a parliamentary committee today that there was still a slim chance of another rate cut but would depend on a number of factors including the job market and the real estate
“We would argue that this is consistent with a central bank that remains reluctant to cut much further, with the case needing to be compelling,” RBC Capital Markets senior economist Su-Lin Ong said.