AUD under pressure from a reduction is US interest rates?.If US...

AUD under pressure from a reduction is US interest rates?.

If US drops rate the flow on effect to cash and bond markets is a reduction in demand for US dollars which results in a drop of value for USD exchange rate in relation to other currencies.

if a reduction in rates in matched by other jurisdictions then it creates an equilibrium which means exchange rates stay about the same.

If other jurisdictions maintain interest rates at a higher level it creates a demand for that jurisdictions currency for investors seeking a higher rate of return (pencil in RBA maintaining higher rate in Australia)

So how does a drop in US rates put AUD exchange rate under pressure in relation to USD