Forexpros – The Australian dollar was down against its U.S. counterpart on Wednesday, after the Federal Reserve dampened expectations for a third round of monetary easing, supporting demand for the greenback.
AUD/USD hit 1.0497 during late Asian trade, the session low; the pair subsequently consolidated at 1.0516, shedding 0.33%.
The pair was likely to find short-term support at 1.0473, Monday’s low and a six-week low and resistance at 1.0574, Monday’s high.
In its rate statement on Tuesday, the Federal Reserve said it expects “moderate economic growth” and acknowledged the recent improvement in the labor market, saying it expected the unemployment rate to “decline gradually.”
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
Sentiment on the Australian dollar was also dented after a report showed that the Westpac/Melbourne Institute index of consumer confidence slumped in March, as uncertainty over the global economic outlook weighed and as major banks raised mortgage rates, despite two successive rate cuts by the country’s central bank late last year.
The Aussie was higher against its New Zealand cousin, with AUD/NZD rising 0.40% to hit 1.2864 and inched higher against the yen, with AUD/JPY easing up 0.05% to hit 87.54.
Later in the day, the U.S. was to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Federal Reserve Chairman Ben Bernanke was due to speak; his comments would be closely watched for clues to the future possible direction of monetary policy.
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