Forex – Aussie, kiwi little changed vs. greenback after Fed minutes

The Australian and New Zealand dollars were little changed against their U.S. counterpart on Thursday, after the minutes of the Federal Reserve’s latest policy meeting boosted expectations for a June rate hike.

AUD/USD was steady at 0.7499.

The minutes of the Fed’s May meeting released late Wednesday showed that the central bank plans to unwind its balance sheet towards the end of the year, possibly using a system where cap limits are implemented on how much the Fed would roll off every month without reinvesting.

The Fed also signaled that interest rates could be raised soon, but added that “it would be prudent” to wait for more U.S. economic data.

NZD/USD was almost unchanged at 0.7053, just off the previous session’s two-month peak of 0.7060.

Meanwhile, markets were still recovering from Moody’s decision to downgrade China’s credit rating for the first time in almost three decades.

Moody’s warned that China’s financial strength is likely to deteriorate in the coming years, as its economy slows and its national debt keeps rising.

China is Australia’s biggest export partner and New Zealand’s second biggest export partner.

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