The Australian dollar has fallen to a three-year low after minutes from the US Federal Reserve’s last meeting revealed some policy-makers said tapering should start soon.
Early on Thursday, the local unit was trading at 89.71 US cents, down from 90.36 cents on Wednesday.
The Aussie fell to its lowest point since August 2010 after the greenback was boosted by the revelation that “a few” members of the Federal Open Market Committee (FOMC) “suggested that it might soon be time to slow somewhat the pace” of asset purchases, the minutes said.
But the timing of the Fed’s plan to taper its stimulus program remained unclear, as others in the group “emphasised the importance of being patient”.
They said more data gauging growth in the economy was needed before reducing the $US85 billion-a-month bond-buying program.
US stocks finished a choppy day lower .
The Dow Jones Industrial Average fell 105.44 (0.70 per cent) to 14,897.55 on Wednesday.
The broad-based S&P 500 dropped 9.55 (0.58 per cent) to 1,642.80, while the Nasdaq Composite Index gave up 13.80 (0.38 per cent) at 3,599.79.
Art Hogan, head of product strategy at Lazard Capital Markets, said the vagueness of the Fed’s position raised uncertainty.
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“The market would like more clarity and it’s not getting that,” Hogan said.
“The market is reacting to this vacuum of new news and selling off.”
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