AUD/USD at 0.8830 after Fed Taper

The Australian and New Zealand dollars fell against most of their major peers amid speculation the U.S. Federal Reserve will continue tapering stimulus that has buoyed asset prices around the world.

The Aussie slid for a fourth day, its longest losing streak this month, after the Fed yesterday decided to trim the pace of its monthly bond purchases by $10 billion to $75 billion. Volatility in the currency fell to the lowest in almost a month. Australian government bond yields rose the most in at least two weeks.

“The overall feeling is that the Fed is probably optimistic enough that they’ll probably continue the tapering in coming months,” said Sean Callow, a Sydney-based senior currency strategist at Westpac Banking Corp. “I think we’ll see more weakness in the Aussie near-term.”

Bloomberg

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