Good morning! Welcome to the ABC’s market blog. I’ll be your guide this morning.

The big surprise for me is that the Australian dollar has fallen below 62.3 cents this morning. It hasn’t been this weak since October 2022 (so that’s a 24-month low).

So it fell by a steep 1.7% overnight.

(To give you an idea of how big that drop was, the currency was sitting at 63.1 US cents yesterday afternoon).

The cause of that was the US Federal Reserve’s decision to cut interest rates by 0.25 percentage points (which was a widely expected decision).

However, the surprising part was that the Fed indicated there would only be two rate cuts next year as US inflation is likely to remain higher for longer than previously expected.

This sent the US Dollar Index (which tracks the greenback against a basket of foreign currencies) up 0.8% to 107.82, its highest level in almost four weeks.

Share market to open lower

In addition, the Fed’s rate forecasts led to a bad day on Wall Street, with the Dow Jones index sinking 1.3%.

The Dow has fallen for 10 straight days, making it the longest losing streak since 1974.

The S&P 500, meanwhile, fell 1.5%, and the Nasdaq Composite dropped 2.1%.

This doesn’t bode well for the Australian share market, which is likely to fall 1.2%, according to futures pricing (when trading begins in a few hours).

Meanwhile, spot gold to drop 1.5% (to $US2,605 an ounce (which typically happens when the US greenback strengthens).

On oil markets, Brent crude futures slipped 0.2% to $US73 a barrel.

Iron ore fell 2.1% to $102.40 a tonne, which is likely to drag ASX mining stocks lower this morning.