Aussie moves towards 74 cents after US interest rate rise

The Australian dollar opened lower this morning after the greenback strengthened from a hike in the US interest rate overnight.

After closing at 0.7502 on Monday night, the Aussie managed to reach 0.7518 before being dragged lower. It continued to lose ground yesterday and closed at 0.7470.

The Fed lifted the US interest rate to 4.00% overnight, the highest it has been in over 4 years. In the statement accompanying the decision, the Fed remained positive about the economy, dismissing setbacks caused by the hurricanes and high oil prices as short term hurdles. This was the Fed's 12th successive hike and the impression is they could continue to lift the interest rates for another quarter.

The Aussie is lower against the cross rates this morning. The euro cross has lost over a cent over the last week. It initially found support at 0.6200, but is trading lower this morning.

The RBA's interest rate decision will be announced at 9.30am this morning with no change forecast. With the USD continuing to improve, the Aussie is struggling to find it's feet. It looks supported at 0.7420 but this could be tested  tomorrow  if the  local  trade balance deficit is worse than expected.