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US Dollar rises to high levels after Fed meeting, Aussie stocks slip

IG Analyst

Publication date : 2018-10-18T01:57:00+0100

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The US dollar index has risen to its highest level in a week on Wednesday, upon minuets from the Federal Reserve’s September meeting.

The meeting revealed the US central bank would most likely continue to raise interest rates, as widely expected.

The USD index gained 0.49% to 95.510 reaching the highest since level since early October.

Foreign exchange strategists say the Fed's rate hikes have cut into the availability of overseas dollars, and risk caution is warranted.

IG Market Analysts Kyle Rodda says, the document reaffirmed the Fed’s hawkishness, revealing in-depth discussions ranging from cutting the word “accommodative” from the central bank’s language, to debating the possible need to hike rates above the “neutral rate”.

Stocks in Australia were also affected after the minuets were released, following another turbulent session on Wall Street overnight.

The ASX200 was largely flat after slipping in early trade, while the energy sector saw a decline of 1.16%.

Meanwhile, the Australian dollar was at 0.7106, following a slide from above 0.715.

The Dow Jones Industrial Average slipped by 91.74 points, closing at 25,706.68, while the S&P 500 ended the trading day on Wednesday at 2,809.21, the Nasdaq at 7,642.70.

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