Forex traders made an interesting gambit in Asian trade yesterday, taking the yen and the euro higher.
But that move was reversed aggressively in overnight trade which also knocked the Aussie dollar down to 0.8133 against the US dollar, its lowest level since June 2010.
But it what is turning out to be an incredibly volatile reaction to the Federal Reserve’s decision to drop the “considerable time” phrase and replaced it with a phrase saying they will be “patient” before it moves interest rates higher the Aussie rallied initially to 0.8220 but it’s now plumbing new lows in the 0.8130’s.
US dollar Yen is up at 118.50, Euro is down at 1.2350 and the US dollar is back in the ascendancy after Janet Yellen just said in her press conference that “Patient” only refers to the next two Fed meetings.
She continued her usual cautious tone but that comment seems to have the market rethinking their earlier dovish read on the Fed’s statement.
Thin Christmas markets mean that over the next day or two the Aussie could be a cent either side of where it is now.