The Australian dollar is almost half a US cent higher against the greenback which has weakened after the Federal Reserve raised its interest rate, as expected, but left its outlook unchanged.

At 0635 AEDT on Thursday, the Australian dollar was worth 76.22 US cents, up from 75.75 US cents on Wednesday.

The US central bank forecast three rate rises in each of 2018 and 2019 to reach a long-run level of 2.8 per cent – the same that it projected in September.

‘The downward move in the (US) dollar is interesting and notable in the sense that the only dovish thing I see in this meeting is the two dissents,’ Reuters quoted Erik Nelson, a currency strategist at Wells Fargo in New York as saying.

‘Maybe only one was expected.’

The two dissenters, Chicago Fed president Charles Evans and Minneapolis Fed president Neel Kashkari, disagreed with the rate rise decision, according to the Fed’s policy statement on Wednesday.

The US dollar index against a basket of six major currencies dropped as low as 93.596, the lowest level since Dececember 7, before rising back to 93.683, down 0.44 per cent on the day.

The greenback had weakened earlier on Wednesday after core consumer price data showed slowing inflation, raising concerns the Fed would be less able to execute multiple rate increases next year.

The key local event risk for Thursday is the Australian Bureau of Statistics labour force figures due out at 1130 AEDT.

Meanwhile, the Aussie dollar is also higher against the yen and the euro.


One Australian dollar buys:

* 76.22 US cents, from 75.75 on Wednesday

* 86.04 Japanese yen, from 85.84 yen

* 64.67 euro cents, from 64.43 euro cents

(*Currency closes taken at 1700 AEDT previous local session)