Australian Dollar US Dollar Exchange Rate Appreciates ahead of Potential Fed Rate Hike
The Australian Dollar US Dollar exchange rate has appreciated moderately today, but may drop off shortly on the high-impact Fed interest rate decision.
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US Dollar demand has been limited by anticipation for the high-impact central bank announcement, with tension rising about whether a hike will or won’t occur.
AUD USD Recap: Weakened US Dollar Limited Damage from Falling AU Confidence and Vehicle Sales
The Australian Dollar has been in a stable position against the US Dollar so far today, mainly by virtue of uncertainty reducing the US Dollar’s overall appeal and causing investors to turn to AUD.
Domestic data out of Australia has generally been disappointing, with December’s Westpac consumer confidence index falling from 101.3 to 97.3 and new motor vehicles sales in November printing negatively.
On the US Dollar’s side, recent retail sales figures have fallen on the month and the year in November and industrial production has also come out negatively.
The overriding limiting factor on USD has been the imminent Fed interest rate decision, which had an over 94% chance of a hike at the time of writing.
Despite these odds, the US Dollar has remained soft, on account of concerns that the Fed may still leave rates on hold due to Trump concerns.
Australian Dollar US Dollar Forecast: Rate Hike could Damage AUD, Hopes for Incoming Employment Rise
The next notable Australian Dollar data to watch out for will come during the afternoon, when AU employment data is announced.
In November, the unemployment rate is forecast to remain at 5.6%, but the number of employed is expected to rise by 10k persons. Out around the same time will be the Reserve Bank of Australia (RBA) bulletin, which may shift AUD.
US Dollar Australian Dollar Exchange Rate Outlook: Fed Rate Hike to Provide Temporary USD Boost
The main event for the US is set to arrive shortly, consisting of the December Fed interest rate hike.
As with 2015, an end-of-year rate hike is forecast to take place. This outcome has been heavily priced in by investors and economists alike, however, so any USD gains may be fairly uninspiring.
By extension, a US Dollar slump on profit-taking in the short-term remains a distinct possibility.
Recent Interbank Exchange Rates
At the time of writing, the Australian Dollar US Dollar (AUD USD) exchange rate was trending in the region of 0.75 and the US Dollar Australian Dollar (USD AUD) exchange rate was trending in the region of 1.33.