Selling pressure remains for the Aussie Dollar

The latest indications of the Federal Reserve on US monetary policy caught currency traders by surprise. The AUDUSD reversed some of its losses by rallying more than 120 basis points right after the Fed stated that it plans to raise interest rates at a slower pace than what it had previously predicted. The FOMC left the Fed funds rate (FFR) at 0.25% but lowered the forecast for 2016 and 2017 to 1.625% (prior was 1.875%) and 2.875% (prior was 3.125%), respectively. The FOMC also indicated inflation continues to run below target, while 15 officials see the first hike in 2015, and two officials see the first hike in 2016. Despite the recent spike, Saxo Capital Markets still believes the AUDUSD will be under further selling pressure, as iron ore continues to weaken and the RBA looks to be open for possible further easing. To read more visit: (VIEW LINK)