The Aussie dollar roared higher after the Fed decision

The Fed stood pat this morning leaving rates on hold. In what was a somewhat dovish statement the Fed said part of the reason for the decision was the that they are taking account of what’s happening overseas.

That saw the Aussie dollar, which had drifted below 0.7150 in pre-announcement trade, punch above 72 cents soon after the release.

But given the Fed’s concerns about overseas events, namely China, traders struggled to find a catalyst to drive the Aussie dollar too much higher. That was particularly so given it is still apparent that the Fed intends to hike at some point in 2016.

All that changed once Janet Yellen began her press conference and made it clear that the Fed had taken “recent strength” in the US dollar into account, amongst other things, in deciding to leave rates on hold.

That was a signal to forex traders that the Fed wants a weaker US dollar. That doesn’t just take the pressure off the Aussie dollar but off commodities as well. As a result the Aussie buyers are in and the AUDUSD rate is up 80 points to 0.7273.

Here’s the chart: – audusd 18092015

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