Dhaka, Bangladesh (BBN)– The Australian Dollar (AUD) raced to a 28-year high against the greenback on Tuesday after a surprise Australian interest rate hike and the Euro (EUR) traded above USD 1.4000, buoyed by a pick-up in the euro zone manufacturers’ output. EUR struggled on Wednesday to push higher against USD, which remained on back foot as the Fed looked set to provide more stimuli to spur a flagging recovery.

Uncertainty over a fresh round of US monetary easing weighed on the US Dollar (USD) on Friday. USD fell just shy of a 15-year low against the Japanese Yen (JPY) on Monday, with lackluster US GDP data failing to shake expectations of the Fed’s further stimulus for the economy, a weekly report said.

However, USD extended tenuous overnight gains on Tuesday after surprisingly strong US manufacturing data prompted more short-covering but rises were seen limited ahead of the Fed’s policy meeting.

USD rose to 80.71 JPY, though it remained within sight of the record low of 79.75 JPY set in 1995.

Traders said the market was unwilling to make new bets ahead of Fed’s policy decision. On Thursday, the Fed’s declaration of the policy to buy more government debt caused USD to hover near its 2010 low against a basket of currencies and a 28-year trough against AUD. EUR hit 9-month highs at USD 1.4264 after the Fed’s decision.

BBN/SSR/SI-06Nov10-11:36 am (BST)