AUD Surges as Trump's Rate Hike Rant Weighs on USD
The Australian Dollar (AUD) has rebounded near the 0.7110s area on Thursday after spending recent sessions in decline, largely due to expectations of a hawkish Federal Reserve (Fed) decision.
However, despite the Fed's quarter-point rate hike to a range of 3.75% to 4.00%, its first increase since 2023, the US Dollar has softened rather than strengthened.
This unexpected move is attributed in part to political tensions between the White House and the central bank, with President Donald Trump publicly urging the Fed to slash rates to '1% or less' and expressing his support for Chair Kevin Warsh while disagreeing with higher interest rates.
The AUD's rebound may be linked to better risk appetite on Wall Street, where the S&P 500 edged higher and the Nasdaq climbed as investors were reassured by Warsh's stance on inflation.