Will the FED taper at tomorrow’s interest rate meeting? If it does what will be the impact on the AUD? (Mike Vaughan)

AUD GBP Struggles at the 0.5350 Price Level

Will the FED give an early Christmas present to AUD buyers tomorrow? With rumours circulating that the FED may consider starting to unwind QE tomorrow during its interest rate meeting we may well see further excellent buy opportunities for the Australian Dollar as the market begins to price in this scenario.

However for me I believe it is still too early for the FED to begin tapering and I would expect them to wait until the first/second quarter of 2014. With the FED highlighting a sustained period of falling unemployment, something that isn’t happening yet, I still feel they will adopt a wait and see approach before considering tapering QE on any level. For this reason I believe anyone looking at GBP/AUD tomorrow could end up trading at levels in excess of a four year high but I would then not be surprised to see a shift in the Aussies favour come tomorrow evening. The FED decision is scheduled for 19:00 GMT.

For me we are seeing some fantastic opportunities for both EUR/AUD and GBP/AUD. With the pound having gained in excess of 15 cents in just over 6 weeks (or over 8%) this is a great return for AUD buyers. Should you wish to discuss the current market conditions and my views and opinions in more detail then please contact the office on +44 (0)1494 725353. Alternatively please email me with a brief overview of your current requirement and I will aim to get in touch with your options as soon as I can. Please email Mike at [email protected]