Investing.com - The Australian dollar was higher against the U.S. dollar Friday, regaining ground lost when investors fled to the safe-haven greenback in light of a downturn in global equities.
AUD/USD hit 0.9864 in early Asian trade, the pair’s highest Thursday; the pair subsequently consolidated at 0.9834, rising 0.95%.
The pair was likely to find support at 0.9692, Thursday’s low, and resistance at 1.0317, Monday’s high.
The U.S. Federal Reserve said that it foresaw “significant downside risks” in the U.S. economy at the conclusion of its Federal Open Market Committee’s policy meeting.
The Fed’s decision to launch a USD400 billion “Operation Twist”, a combination of buying and selling of short and long term Treasuries, failed to impress investors hoping for a liquidity boost to the ailing U.S. economy.
Wall Street investors reacting to the Fed’s economic assessment sent stocks reeling in the Thursday session, with the Dow Jones Industrial Average dropping 3.51%, the Nasdaq Composite Index fell 3.25%, and the S&P 500 slumped 3.19%.
Earlier Thursday, the U.S. Labor Department reported that the number of Americans filing for initial jobless benefits fell by 9,000 to a seasonally adjusted 423,000 for the week ending September 16.
Market expectations were for the figure to decline to 420,000. for the period.
Australian stocks mirrored sharp losses on European and U.S. markets, with the benchmark S&P/ASX 200 falling 1.51% to 3,906.80 in early Friday trade.
Meanwhile, the Australian Dollar was up against both the euro and the Japanese yen, with EUR/AUD falling 0.23% to hit 1.3787 and AUD/JPY adding 0.77% to hit 74.82.