Risk Sentiment Drags on AUD/USD Post-Fed Hike
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Commodity-linked currencies like the Aussie tend to underperform when US monetary policy tightens, since higher rates typically dampen global risk appetite and pressure growth-sensitive assets.
With the Fed now at 3.75%-4.0%, investors are recalibrating exposure to riskier currencies. AUD/USD remains a key barometer of this shift — a pair that reacts quickly to changes in global sentiment, commodity demand, and relative central bank tone between Sydney and Washington.