AUD/USD pulls back from 3 1/2-month high as markets mull the FOMC minutes

AUD/USD pulled back from a fresh 3 1/2-month high on Wednesday, with the greenback’s sell-off easing, after the minutes of the Federal Reserve’s most recent meeting did little to sway investors’ opinion that its policy tightening cycle has likely ended.

The minutes showed the Fed would proceed “carefully” and that “all participants judged it appropriate to maintain” rates at current levels.

FOMC members noted that further monetary policy tightening would be appropriate in case incoming information suggested that progress toward the central bank’s 2% inflation target was not sufficient.

Meanwhile, market players are almost certain that the Fed will leave interest rates on hold in December. There is now a nearly 30% chance of a Fed rate cut as early as March priced in.

US Treasury yields, which have underpinned the US Dollar, have eased from multi-year highs registered in October.

The yield on benchmark US 10-year Treasury Notes was last at 4.402%, after climbing as high as 5% in mid-October.

As of 9:07 GMT on Wednesday AUD/USD was edging down 0.11% to trade at 0.6548. Yesterday the major Forex pair went up as high as 0.6589. The latter has been the pair’s strongest level since August 10th (0.6617).