Fed Meeting Set to Spark Volatility in AUD and NZD
The Australian and New Zealand dollars are experiencing volatility as investors await the Federal Reserve's meeting. Markets imply a 92% chance of a quarter-point rate rise, which would likely cause considerable volatility.
Credit Suisse's head of research, Chris Weston, notes that markets could experience 'a fairly wild hour or two' as traders react to the statement, dot plot, economic projections, and Chair Kevin Warsh's press conference. Markets are priced for at least three Fed hikes by early next year, suggesting the greenback is vulnerable if Warsh sounds less hawkish.
The Aussie has been pressured at $0.7125, having eased 0.1% overnight. Support lies at the recent three-week low of $0.71085, with resistance at $0.7149 and $0.7187. The kiwi dollar sagged to a two-month trough of $0.5740 after losing another 0.3% overnight.