Australian Dollar Forecast Nov 4

The move had been widely anticipated, but the accompanying statement, which said it was "prudent to lessen gradually" the stimulus provided by low interest rates, was less hawkish than many had been expecting.

As a result, expectations for another hike at the December meeting have fallen slightly, with money markets currently pricing in less than a 60% chance of another 25bp hike in December.

With expectations for future interest rate hikes pared back marginally, the AUD has been sold off a little, with the fall further enhanced by a retreat back to the USD on the back of renewed investor nervousness.

Of interest for local market's today will be the Retail Sales and Building Approvals data for the month of September.

Retail sales are expected to show an increase of 0.5% mom, down from the 0.9% increase in August, while building approvals are expected to rise by around 2.3% mom.

At this stage any decent pullbacks in the AUD are still viewed as buying opportunities.

Majors: Offshore markets have been mixed overnight. European equity markets were hit hard by news that UBS AG, the largest Swiss Bank, posted a larger than expected third quarter net loss of CHF564mio.

There were also report's that the UK's two largest banks Lloyds and RBS would need additional bailout funds from the UK Government.

The US equity markets put in a slightly better performance, with investors finding some encouragement from the news that Warren Buffet's Berkshire Hathaway has agreed to buy railroad company Burlington Northern.

With the uncertainty surrounding the markets the USD managed to record gains against most of its major counterparts.

Market focus is now firmly focused on tonight's FOMC rate decision.

Official interest rates will remain at record lows but close attention will be paid to the accompanying statement to see if the wording changes at all to suggest when the Federal Reserve might begin to increase US interest rates.

Provided by bellfx.com.au