Aussie dollar continues to trade above 67 US cents

Key Movers

The US Federal Reserve has cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates helped tame inflation, but that also made borrowing painfully expensive for American consumers. The rate cut, the Fed's first in more than four years, reflects its new focus on bolstering the job market, which has shown clear signs of slowing. Policymakers voted 11-to-1 in favour of lowering the US central bank’s benchmark rate to between 4.75% and 5.00%, the Fed announced in a statement. Stocks surged in reaction to the news, as the central bank’s move confirms recent bets on Wall Street that the central bank would opt for a jumbo interest rate cut over a quarter-point cut. The Fed said its rate-setting committee “has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in balance.” Looking ahead, the Fed has indicated the possibility of two to three additional 25 basis point rate cuts in the upcoming meetings of 2024, underscoring the committee's cautious stance amidst an uncertain economic outlook.