Australian dollar retreated against its US counterpart on Thursday after market players abandoned their concerns about the exit of FEDs stimulus.
AUD/USD pair slid to 0.9250 during early European session. Support was expected in the range 0.9225-0.9245, while resistance was to be met at June 18th high, 0.9574.
Federal Reserve Bank Chairman Ben Bernanke said on Wednesday that the central bank may start unwinding its unprecedented bond-purchasing program this year and end it entirely in mid-2014, if the economy finally achieved the sustainable growth FED has sought since the end of the recession in 2009. The Federal Open Market Committee left the monthly size of asset purchases unchanged at 85 billion USD.
“Downside risks to the outlook for the economy and the labor market have diminished. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.”, the FED said in its statement. Policymakers raised their growth forecasts for 2014 to a range of 3% to 3.5% and reduced their outlook for unemployment rate to as low as 6.5%.
“If the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriate to moderate the pace of purchases later this year. We will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.”, Bernanke said, cited by Bloomberg.
Aussie decreased in value one day after the Conference Board announced that its leading index for Australia rose by 0.3% in April, after a 0.1% increase during the previous month.
AUD/NZD ticked down 0.07% to 1.1767, while AUD/JPY pair slid 0.54% to 89.18.
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