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Roller-coaster ride for Aussie on Fed, jobs

The Aussie had a wild ride over the last 24 hours as the local currency was first boosted by the US Federal Reserve decision before quickly turning lower on a weaker than expected local jobs result.

Initially, the Fed decision not to change forecasts for three rate hikes this year saw markets disappointed, with the USD falling. The AUD was boosted as a result.

However, a weak reading from Australian jobs, with 6.4k jobs lost rather than the expected 16.3k gain, saw the Aussie quickly sent lower in yesterday’s session. The unemployment rate climbed from 5.7% to 5.9%.

Aussie pounded

The AUDUSD was down 0.5%.

The Aussie fell 0.8% versus the euro and lost 0.6% versus the Japanese yen.

The Aussie’s biggest losses were against the British pound. The GBP surged after last night's Bank of England meeting saw one member vote for a rate hike. The news was seen as increasing the likelihood of rate hikes in the UK. The AUDGBP fell 1.0%.

The AUDNZD inched higher. A weak fourth-quarter GDP number, at 0.4% versus 0.7% expected saw the NZD sold lower yesterday.

Gee whiz. G20

The US dollar will remain in focus over the next 24 hours with major industrial production and consumer sentiment numbers due.

Overnight, US data continued to beat expectations, with housing starts and unemployment claims all more positive than expected.

Over the weekend, the G20 meeting of leaders from the 20 largest economies will be closely watched.

By Steven Dooley -- Currency Strategist (APAC)

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