THE Australian dollar (AUD) has momentarily soared to a 4-week peak after the Federal Reserve’s verdict to keep its interest rate unmoved, before drifting away. At around 0701 Australian Eastern Time, Friday, the AUD was trading at 71.67 US cents, retreating from 71.85 cents on Thursday. Early Friday morning, the currency rose at 72.76 US cents, its biggest since August 25, before sliding back down. Federal Reserve chair Janet Yellen citied concerns with regards the slowdown in the Chinese market and its effect on the US economy as the reason why there was not a hike in interest. Yellen stressed that the US economy will keep on growing but at a moderate pace and that a rate hike could still be carried out before the end of 2015. National Australia Bank foreign exchange planner Emma Lewson disclosed that the Australian currency initially was up versus a sluggish US greenback but then tumbled back when Yellen issued her post-conference media statement. According to Lewson, Yellen issued a guide that this was a deferment of a rate increase, not a total scrapping. “The time has come but the central bank could not bring itself to increase interest rates for the first time since the financial turmoil. BK Asset Management managing chief Cathy Len added that central bank’s projection for the economy has fundamentally remained the same. But the central bank left rate increases on the table, and Yellen indicated September was a postponement of an inevitable rate increase, which meant that October was now a live event, Lewson said.

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