The Aussie's two-day rally against the yen and four-day rally against the greenback each closed on Wednesday as concerns grew for the sovereign debt scourge's damaging tendencies in the euro zone. Borrowing expenses were climbing in Spain as the country is set to conduct another bond auction on Thursday.
But one analyst said the Australian dollar is poised to gain should policy makers with the U.S. Federal Reserve issue additional economy-spurring measures. The Federal Open Market Committee is expected to adjourn two days of meetings Wednesday afternoon in Washington.
"The market has built in strong expectations for some sort of policy action from the FOMC," strategist Andrew Salter with Australia & New Zealand Banking Group told the news source. "If we get some sort of flag by the Federal Reserve to additional purchases, then that would be a positive for the Aussie."
The FOMC's adjournment, which will be Thursday morning in Australia, is projected to result in a variation of Operation Twist, according to The Sydney Morning Herald. That would entail the sale of securities that are shorter term and the purchase of bonds that are longer term.
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