AUD/USD plummets as US Fed sticks to low interest rate

NEW YORK (Forex News Now) – The Aussie fell badly against the greenback on Wednesday, as the US Federal Reserve renewed its pledge to keep interest rates low for an extended period.

In currency market trading, AUD/USD hit 0.9931 at around 8:20 A.M., GMT, down 0.591% after nearing parity at the close of the previous day.

The US Federal Reserve on Wednesday kept the federal funds rate at 0.25%, the same mark it has been since the rate was lowered from 1.00% in December 2008. The Federal Open Market Committee said after its final meeting for the year that signs of economic strength were not enough to bring down unemployment, and that inflation continued to trend lower.

According to AUD/USD analysis, the Aussie was likely to touch support around Sunday’s low of 0.9833, and to encounter resistance around yesterday’s high of 1.0028.

The Aussie’s fall also came as data released by the Australian Bureau of Statistics showed that new motor vehicle sales rose by 0.2% in November.

Elsewhere, the Aussie also fell against the yen: AUD/JPY traded at 83.40, down 0.21%, according to intraday analysis.