AUD Falls to Four-Week Low as Fed Hike Takes Center Stage

The Australian dollar has been holding steady at around $0.71, marking a four-week low, as the Federal Reserve's interest rate hike takes center stage.

The Fed increased its federal funds rate by 25 basis points to 3.75%-4.00%, citing elevated inflation and updated projections showing that 16 of 18 officials expect at least one more hike this year.

The Reserve Bank of Australia's upcoming policy decision on September 29 is now in focus, with markets pricing an 85% chance of a 25bp increase from the current 4.35% rate and expectations for the cash rate to reach 4.85% by early 2027.