The Australian dollar fell versus the U.S. currency after the Federal Reserve said it’s holding off from increasing monetary stimulus.
New Zealand’s dollar declined against the greenback as the Fed said it won’t undertake asset purchases, known as quantitative easing, unless economic expansion falters or prices rise slower than 2 percent, signaling less additional liquidity to buoy higher-yielding assets. Global stocks and commodities declined.
The Australian dollar slumped 0.8 percent at 5 p.m. New York time yesterday when it fell as much as 1.1 percent, the largest intraday decline since March 22. It rose 0.1 percent to 85.56 yen.
New Zealand’s dollar fell 0.6 percent to 81.89 U.S. cents. The so-called kiwi rose 0.4 percent against the yen.
The MSCI World Index of stocks declined 0.6 percent and the Standard & Poor’s GSCI Index (MXWO) of 24 raw materials dropped 0.4 percent.
The minutes of the Fed meeting released yesterday show decreased urgency to add monetary stimulus. At their January meeting, a few members of the Federal Open Markets Committee said that current economic conditions “could warrant the initiation of additional securities purchases before long.” In last month’s meeting, no sentiment was expressed for additional easing without a deterioration in conditions.
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