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Currency Market Analysis

Sep 19, 2019 | Currency Market Analysis

Global Themes

Aussie lower after Fed’s “upbeat’ cut

The Australian dollar was weaker across the board overnight after the US Federal Reserve cut official interest rates but remained broadly upbeat on the US economy.

The Fed stayed positive by upgrading its 2019 economic growth forecast to 2.2% (from 2.1%) and indicating that it doesn’t expect to cut rates again in the short term.

The Fed's forecasts indicate US rates will remain on hold until 2021.

These forecasts, of course, are subject to change, with the Fed continuing to signal that it is “data dependant”.

Greenback climbs

The Fed’s apparent reluctance to cut again saw the US dollar climb and the AUDUSD fall.

The AUDUSD fell 0.5% to end at the lowest level since 6 September.

The Aussie was weaker in most other markets down 0.2% in both the AUDEUR and AUDJPY.

Employment due

The major release today comes from the local employment market with the August jobs figures due at 11.30am AEST.

The market expects 10k new jobs to be created with the unemployment rate expected to rise to 5.3%.

Later, the Bank of Japan, Swiss National Bank and Bank of England all meet.

By Steven Dooley, Currency Strategist APAC

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