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$A higher ahead of FOMC meeting

Reported by AAP
Monday, July 29, 2013
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The Australian dollar is higher as investors sell the greenback ahead of a Federal Reserve meeting later in the week.

At 1200 AEST on Monday, the local unit was trading at 92.72 US cents, up from 92.54 cents on Friday.

Early on Thursday morning, Australian time, the US Federal Reserve will finish its two-day policy meeting.

The Federal Open Markets Committee (FOMC) is expected to make an announcement on the timing of the tapering of its $85 billion-a-month bond-buying program designed to stimulate the economy will be on the agenda.

CMC Markets chief market analyst Rick Spooner said anticipation of the FOMC announcement had been the main driver for currency markets in recent days.

"Given the recent run of economic data, there seems little risk of the Fed suggesting that it will be any more aggressive on tapering than current market expectations," he said.

"The risk is all the other way, with potential for the Fed to emphasise that it won't reduce its asset buying program unless unemployment continues to fall."

In recent years, the Fed's series of bond-buying programs have put downward pressure on the US dollar and is one of the main reasons the Australian dollar has been above parity for most of the past two years.

Meanwhile, the Australian bond market was weaker.

At 1200 AEST on Monday, the September 10-year bond futures contract was trading at 96.245 (implying a yield of 3.755 per cent), up from 96.210 (3.790 per cent) on Friday.

The September three-year bond futures contract was at 97.340 (2.660 per cent), up from 97.290 (2.710 per cent).

03/09/2014 07:22Sydney, Australia. 3 September,2014
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