AUD Tumbles as US Interest Rates Jump with Hawkish Fed

The Australian Dollar has taken a hit against its US counterpart following the Federal Reserve's decision to raise interest rates.

In a unanimous 12-0 vote, the Fed raised the federal funds target range by 25 basis points to 3.75%-4.00%, marking its first rate increase since July 2023.

The US Dollar Index (DXY) has extended its gains towards the psychological 100.00 mark, while the AUD/USD pair slid nearly 20 pips in the immediate reaction and trades around 0.7113 at the time of writing.

The updated dot plot shows that 16 out of 18 Fed officials expect at least one more rate hike this year, with 12 policymakers projecting one additional quarter-point increase, four expecting two more hikes, and two seeing no further moves.