Australia, NZ dollars nurse losses as markets wager on hawkish Fed

SYDNEY: The Australian and New Zealand dollars languished near multi-week lows on Thursday as wagers on additional hikes in US interest rates buoyed the greenback and reinforced expectations of further policy tightening at home. The US Federal Reserve raised rates by 25 basis points, as expected, while also projecting at least one more increase by December. Futures now imply a roughly 50% chance of another hike in October and are fully priced for a move by year-end. That left the Aussie at $0.7096, having slid 0.6% to a three-week trough in the wake of the Fed. The break of $0.7100 was technically bearish, opening the way to support around $0.7070 and $0.6922. The kiwi dollar steadied at $0.5720, after losing almost 0.8% overnight to touch a 10-week low. Support now lies at $0.5672 and $0.5627. The Fed’s hawkish shift only reinforced expectations for further hikes in Australia and New Zealand, along with Japan, the EU and the UK. Markets imply an 87% chance the Reserve Bank of Australia will lift its 4.35% cash rate by 25 basis points at its next meeting on September 29, and is almost fully priced for a move to 4.85% by February. The Reserve Bank of New Zealand meets on October 28