Australia: The FOMC rate decision announcement overnight stated that the federal funds rate would remain unchanged at 0.0-0.25 "for an extended period of time".

The accompanying statement was relatively downbeat with the Federal Reserve revising their growth forecasts downwards. The growth forecast for 2011 has been cut from 3.1-3.3% to 2.7-2.9%, with growth in 2012 expected to range from 3.3 to 3.7%, down from the April forecast of 3.5 to 4.2%.

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The revision to these forecasts hit the growth related currencies, such as the AUD and NZD. The AUD is struggling to find any clear direction at the moment, with the wider USD1.0450 -1.0750 range holding firm.

Risk related to Europe and the US is keeping a lid on the topside with solid exporter and speculative bids emerging sub USD 1.0500.

Majors: As mentioned above, the US Federal Reserve issued a fairly downbeat assessment of the US economy while also signaling that a QEIII announcement would not be forthcoming.

US equity markets fell on the news, with both the Dow and the Nasdaq down by 0.7%.

European markets fared marginally better as they were finished trading by the time the US Fed announcement was released.

The situation in Europe remains perilous, with no firm resolution in terms of the Greek debt crisis. The Financial Times has reported that the opposition in the Greek parliament will vote against the government's new austerity proposals, adding further uncertainty to the outlook.

The threat of default remains real, even despite all the efforts of the European Finance Ministers and the IMF to try and prevent such an occurrence.

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