AUD Holds Ground as Markets Await Fed Decision

The Australian Dollar (AUD) is holding steady against the US Dollar (USD) ahead of the Federal Reserve's (Fed) monetary policy announcement, due at 18:00 GMT today. The AUD/USD pair is trading around 0.7134, barely changed on the day.

The market has largely priced in a 25-basis-point rate hike, which would lift the federal funds target range to 3.75%-4.00%. However, the Fed's decision may still influence the US Dollar's reaction, with a hawkish message potentially strengthening the Greenback and pushing AUD/USD lower.

The Reserve Bank of Australia (RBA) has maintained a hawkish stance, keeping its cash rate unchanged at 4.35% in August while warning that another increase was possible if inflation failed to ease. The RBA's decision on interest rates will also impact the Australian Dollar, with a potential hike supporting AUD.