Australian dollar higher after Fed revises forecasts

THE Australian dollar is higher after the US Federal Reserve downwardly revised its economic growth forecasts.

A 1 Australian Dollar coin and a 1 US Dollar note are seen in Canberra, Tuesday, May 21, 2013. As the US economy rebounds, there are predictions that the Australian dollar could fall as low as 90 US cents in the coming weeks and months. (AAP Image/Lukas Coch) NO ARCHIVING

THE Australian dollar is higher after the US Federal Reserve downwardly revised its economic growth forecasts.

At 0630 AEST on Thursday, the local dollar was trading at 94.07 US cents, up from 93.36 cents on Wednesday.

The Fed expects growth to be just 2.1 per cent to 2.3 per cent this year, down from 2.8 per cent to 3.0 per cent in its last projections in March.

Slower growth would mean the Fed may have to slow the tapering of its bond purchases, which would weaken the US dollar and support the Australian dollar.

Originally published as Australian dollar higher after Fed revises forecasts