Forex - Australian dollar weakens as investors turn focus to USD

Investing.com - The Australian dollar was lower in Asian trade on Thursday as investors focused on the U.S. dollar and expectations the Fed may move to raise interest rates sooner than expected.

AUD/USD traded at 0.9019, down 0.23%, in Asian trade while its neighbor, NZD/USD, traded at 0.8522, down 0.35%, after data showed fourth quarter GDP growth of 0.9%, matching expectations, but slightly above the Reserve Bank of New Zealand's forecast of 0.8% growth.

The RBNZ is expected to raise its official cash rate again this year from 2.75% now. It hiked by 25 basis points earlier this month in the face of rapid growth and worries over house price inflation.

Elsewhere in Asia USD/JPY traded at 102.44, up 0.11%, in a light data day with Bank of Japan Governor Haruhiko Kuroda slated to give a speech at 1615 local time (0715 GMT).

Overnight, the dollar shot up against most major currencies after the Federal Reserve cut its monthly bond-buying program to $55 billion from $65 billion, while comments from Janet Yellen suggesting a possible timetable as to when rates may rise spooked markets and sent investors chasing safe-haven greenback positions.

The Fed earlier said it was leaving interest rates unchanged and reduced the amount of bonds it buys in the open market each month to $55 billion from $65 billion, both moves in line with expectations.

The news sent the greenback rising, as the Fed's asset-purchasing program, which kicked off in 2012 at $85 billion a month, has suppressed long-term interest rates for over a year, sending investors to assets like stocks with the hope investing and hiring ensues.

Elsewhere, the Fed omitted previous language calling for rate hikes if the unemployment rate approaches a 6.5% threshold, a policy tool known as forward guidance.

Even though the economy is improving, a highly accommodative monetary policy stance remains appropriate, the U.S. central bank said.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.01% at 80.13.

On Thursday, the U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.