AUD/USD hits week low post Powell’s speech

The Australian dollar undergoes a significant U-turns from 0.9490 and dives to one-week lows at 0.9350. analysts believe that Fed’s Powell is still taking a hawkish stance against hot inflation in front of the journalists, so, his remarks are pushing the USD higher.

The dollar suffered following FOMC’s statement which is seen as dovish. The US dollar whipsawed following the outcome of the Federal Reserve’s meeting. The Australian dollar spiked up to session highs right below 0.6500 following a dovish monetary statement before falling to 0.6350 on the back of Powell’s press conference.

Jerome Powell refuted the idea that the US central bank might have overtightened and reaffirmed the need for ongoing rate hikes to get policy sufficiently restrictive.

Powell also affirmed that economic data suggests that “we may eventually move to higher levels than we anticipated at the September meeting”, which has curbed expectations of a dovish pivot in December.

Regarding next FOMC meeting, Powell assured that there will be a discussion, as no decision has been taken yet and that the time to slow the pace of rates could be as soon as December or at February’s meeting.