Aussie hits new high for 2014

The Australian dollar has reached a new high for 2014 prior to tonight's Federal Reserve minutes release.

The Aussie is trading at $0.9364, as high as $0.9386 in the early session, the highest it has been since November 2013.

Traders have taken some of their profits off the table ahead of the statement from the US central bank at 7pm (London time). Last night, Fed member Charles Plosser stated the increase in interest rates will probably come next year, and will depend on ‘the data’. Mr Plosser also expressed his desire to see the Fed give more details about its rate increase plans, but I expect the US central bank will continue to keep its cards close to its chest.

If Janet Yellen reiterates her previous slightly dovish stance, we could test the $0.94 mark. I feel a break through that level would have to come from Australian dollar strength rather than US dollar weakness.

Australia will announce the unemployment rate at 2.30am (London time), with expectations of an increase to 6.1%. If the jobless figure is worse than expected, we could retrace back to the $0.93 mark. As I mentioned previously, the Reserve Bank of Australia feels the AUD is still too strong.

Spot FX AUD/USD chart

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