Markets not happy with US Fed decision

The Australian market fell sharply today following negative leads from the US overnight.

The decision by the US Federal Reserve to purchase long-term bonds instead of mortgage funds did not go down well in the markets today. The prevailing sentiment (in the market) is that the US Fed is not doing enough to stimulate the US economy.

We saw some sector rotation with money flowing through to defensive stocks including telecom and healthcare sectors. The Finance sector was a big drag today with all the major banks trading lower. Mining giants BHP and RIO were also down, adding to the drag on the local index.

The US dollar fell sharply on the back of the US Fed's plan as the continuing excessive money supply caused further deterioration in the US dollar against other currencies.

 The Aussie dollar retreated from its overnight high against the US dollar as it faces a technical pull back from its three months. In the long run though, the Aussie may continue to trade higher against the greenback as the US dollar continues to depreciate.