- The Australian dollar trimmed gains against the U.S. dollar on Wednesday as demand for the greenback was bolstered by expectations for a reduction to the Federal Reserve’s stimulus program.

AUD/USD hit 0.8825, the highest since December 23 and was last up just 0.08% to 0.8784.

The pair was likely to find support at 0.8725, Tuesday’s low and resistance at 0.8850.

Demand for the greenback continued to be underpinned ahead of the Fed’s policy statement later in the session, amid expectations for a further reduction in stimulus.

The central bank was expected to roll back its asset purchase program by another $10 billion, to $65 billion per month. The central bank announced the first cut to its stimulus program in December.

The Aussie rose to session highs earlier after Turkey’s central bank announced aggressive rate hikes overnight, following an emergency policy meeting.

The move eased concerns over emerging markets, following a broad based selloff last Friday, triggered by worries over the impact of cuts in Fed stimulus and concerns over a possible slowdown in China.

Australia’s dollar tracked losses in emerging market currencies, falling to three-and-a-half year lows against the U.S. dollar on Friday.

Elsewhere, the Aussie was higher against the yen, with AUD/JPY up 0.31% to 91.11.

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