The Australian dollar rose against most of its top counterparts on Wednesday as speculation developed about the Reserve Bank of Australia opting against reducing interest rates, according to Bloomberg.
Following two days of losses against the world's reserve currency, the Aussie rose as policy makers with the U.S. Federal Reserve prepare to close two days of meetings on Wednesday. The body is likely to provide more information about whether it will taper stimulus.
"I think the governor accepts the need for further stimulus in the Australian economy but he is focused on providing that stimulus through a weaker Australian dollar rather than lower rates, and I think that came out" on Wednesday, chief currency strategist Robert Rennie with Westpac told The Sydney Morning Herald on Wednesday. "If we get nothing from the Fed, I'm not sure that it will manifest in a strong performance in the Australian dollar."
The Aussie fell to its lowest value in about 120 days against the U.S. dollar early during the Wednesday trade session, according to The Sydney Morning Herald.
The Fed has said it intends to taper stimulus but whether that occurs by the end of the year or in 2014 might come out Wednesday afternoon.
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