AUD Holds Steady Ahead of Fed Decision Amid Expectations of Interest Rate Hikes

The Australian Dollar has held its ground ahead of the highly anticipated Federal Reserve decision on Wednesday.

Investors are waiting for the US monetary policy announcement, with expectations that the Fed will raise interest rates by 25 basis points (bps) at its September meeting. According to the CME FedWatch tool, there is a 92% chance of such a move.

The prospect of another interest-rate hike in Australia has helped limit pressure on the Australian currency. Markets assign around a 78% chance that the Reserve Bank of Australia (RBA) will raise its Official Cash Rate to 4.6% at its next meeting, further supporting the AUD.