Ahead of what is set to be an exceptionally volatile day throughout the capital markets shares across Asia and in particular, China and Australia, ended down following Wall Street’s lead in taking a ‘risk off’ tone prior to the Federal Reserve’s policy statement set for this afternoon. With the FOMC set to release its meeting minutes, outline interest rate policy as well as the release of quarterly GDP numbers for the United States. All eyes are on the Fed as markets wait in trepidation for guidance for what the future holds in light of a quarter’s worth of disappointing employment and corporate earnings data out of the United States.
Fed watching hasn’t been the only thing driving markets today, even considering a recent backdrop of jittery markets the aussie dollar has been notable for its volatility. Earlier, the antipodean currency cracked the .80 mark against the USD capping off five days of gains, with a 2% gain on Tuesday, as markets re-evaluated the potential of a rate cut on the part of the Reserve Bank of Australia next week. With many participants no longer certain that a rate decline is in the cards, movement in the AUD has been profound. Right now the aussie is just below its earlier highs, trading in the low 0.80 range versus the dollar, with the kiwi dollar sits in the low .77 level versus the same. Also, with the Reserve Bank of New Zealand also set to release its interest rate policy later today it’ll be wise to watch the southern currencies as price action in both should be expected to be choppy.
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