Australian dollar remained steady against its U.S counterpart on September 16th as investors traded cautiously while keeping an eye on the Fed policy statement and consumer inflation data due later on the same day.
The AUD/USD pair hit 0.7148 during the Asian session before subsequently reach 0.7149.
Earlier on Tuesday, the Reserve Bank of Australia announced that the low interest rates will pursue to support growth, which created a pressure on The Australian dollar.
Markets held concerns that the recent volatility in international financial markets will force the U.S. central bank to opt-out from raising interest rates on Thursday.
The buck was ranging between smaller gains and losses against the yen on Wednesday with the USD/JPY pair dropping 0.09% to 120.31 from its overnight high of 120.46.
The US Federal Reserve will hold a meeting next week which is expected to consider hiking interest rates. If this scenario happens, it will be the first rate increase since June 2006. Rates were held low since 2008 after the financial crisis to accelerate spending and economic growth.
Economists consider that this a suitable time to raise interest rates as the economy has recovered from the global financial crisis of 2008 and no need to keep interest rates low for a longer period of time.
Many investors believe that a rate hike is essential now as keeping interest rate low may create bubbles across different asset classes.
Excon Fuji Securities,, noted that rates are expected to begin hiking before the end of the year. However, raising interest rates could have significant economic impacts that will likely push up dollar prices against major currencies.
