AUD USD Exchange Rate Fluctuates as Markets Await Fed Policy Meeting

Gold hit a 2-1/2 week low, with spot gold XAU= down 0.6 percent at $1,311.51 an ounce.

Microsoft shares ended down 0.2 per cent, while Alphabet was off 0.6 per cent, with both stocks seeing a pickup in volume late in the day.

The Philippine Stock Exchange index, the 30-company benchmark, jumped 113 points, or 1.4 percent, to close at 8,294.14 Monday. Eastern Time. The Dow Jones industrial average edged up 14 points, or 0.1 percent, to 22,385.

Minutes from recent Fed meetings have shown a growing split, with some policymakers saying there is no urgency to raise rates after a drop in inflation, and others arguing the US economy is strong enough to continue "normalizing" monetary policy.

Britain's sterling also started to rise again having been pushed off post-Brexit highs on Monday by Bank of England governor Mark Carney who said any upcoming United Kingdom rate hikes would be gradual and limited.

"It seems the market is holding its breath and waiting for what the Fed has to say regarding the economy and any future interest rate hikes", said Ryan Detrick, senior market strategist for LPL Financial. "There could also be some more political action in Japan before long, as the media is suggesting that (Prime Minister Shinzo) Abe may call a snap election next month amid his rising approval rating and fragile opposition". Japanese markets were closed for a holiday.

That will gradually increase long-term borrowing rates.

In a speech early this month, influential New York Fed President William Dudley said while he was surprised that inflation had been so low, steady growth of the economy should eventually push wages higher, allowing the Fed to continue to raise rates "gradually".

Gold traders and analysts surveyed by Bloomberg turned bearish for the first time in 13 weeks as dollar recovers and USA stocks reached record highs. All are expected to leave policy unchanged but forecasters expect Australian policymakers to strike a more hawkish tone following stronger recent economic activity.

Investors will be listening for any hint of a shift in the central bank's interest rate plans or views on the US economy.

Wall Street stocks gained slightly, with the Dow climbing to a fresh record, while an index of stocks across the globe also inched higher.

As for the dollar, the greenback was positioned lower counter to a range of currencies in Wednesday's early trades.

USA crude futures were down 1 cent at $49.90 per barrel, within sight of Thursday's almost four-month high of $50.50.

- Crude oil futures were higher with West Texas Intermediate crude oil for delivery in October up 0.8% at $50.31 and Brent crude for delivery in November up 0.5% at $55.88.

The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 per cent to 91.739, though it remained well above its more than 2-1/2 year low of 91.011 plumbed on September 8.

  • Anthony Vega