Australian dollar slides to 2-year low as US Fed outlook weighs
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The news: The Australian dollar has tumbled to its lowest level against the US greenback in more than two years after the US Federal Reserve signalled a slower pace of rate cuts next year.
The numbers: The local currency dropped nearly 1.8% to hit 62.2 cents against the US dollar, its lowest level since October 2022.
At 9:15am AEDT, the Australian dollar was trading at 62.21 cents.
The context: The Australian currency dived as the US dollar extended its gains against a basket of world currencies as investors digested the Fed's revised outlook.
Overnight, the US Fed cut rates by 25 basis points to the 4.25% to 4.50% range. But its summary of economic projections (SEP) indicated that policymakers now expect to make two interest rate cuts by the end of 2025, down from four in September.
This prompted a slide in stocks while the US dollar and benchmark US Treasury yields moved higher on the news.
The source: Bloomberg
