AUD/USD sinks to lowest in two months near 0.7620 as USD soars on FOMC projections

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  • US dollar jumps across the board after the FOMC statement.
  • AUD/USD could post the lowest daily close in two months.

The AUD/USD pair tumbled from 0.7705 to 0.7623, in a few minutes following the release of the FOMC statement and projections that triggered a rally of the US dollar across the board.

The Federal Reserve as expected, kept interest rates and the QE program unchanged. The statement was little changed from the previous meeting. The FOMC staff projections now show more rate hikes likely for 2023 compared to March.

In a few minutes, Powell will read a statement and then will answers questions. So volatility across financial markets will likely remain at extreme levels. So far, the immediate reaction to the statement has been of a rally of the dollar, a decline in metals, and in equity prices.

The DXY hits levels above 91.00 for the first time in a month. The dollar also soared versus emerging market currencies. Ahead of Powell, AUD/USD trades around 0.7635/45, sharply lower for the day. The next strong support is located at 0.7585.

On Thursday, during the Asian session, Australia’s May employment report will be released. Consensus point to a net increase of 30K in jobs and the unemployment rate to remain at 5.5%.

Technical levels

 

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