Aussie dollar slides

dollar17The Australian dollar falls against the greenback which strengthens after the Fed chair said the central bank may have a press conference after every meeting.

The Australian dollar is lower after the US currency strengthened following a report that Federal Reserve chair Jerome Powell was considering more post-meeting press conferences.

At 0635 AEST on Wednesday, the Australian dollar was worth 75.74 US cents, down from 76.10 US cents on Tuesday.

Westpac analysts said the US dollar jumped after a WSJ report that Fed Chair Powel is considering holding press conferences after every meeting, rather than only after the major quarterly meetings.

“One implication could be that every meeting becomes ‘live’,” the analysts said in a morning note. “The jump in the USD dented the other major currencies, but interest rate markets were unfazed. US equities are unchanged. The US dollar index is up 0.3 per cent on the day. (The) EUR ground lower from 1.1810 to 1.1780 ahead of the WSJ news, and then dropped quickly to 1.1734 … (The) AUD fell from 0.7620 to 0.7566.”

The major event risks for the local currency on Wednesday is Reserve Bank of Australia governor Philip Lowe’s speech on ‘Productivity, Wages and Prosperity’, at lunchtime in Melbourne, and the Westpac-MI Consumer Sentiment report for June.

The analysts said the Australian dollar on Wednesday is “vulnerable to a break below 0.7560 if the USD remains firm. Tonight’s Fed decision will be key”. The Aussie dollar is also lower against the yen and the euro.

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