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The Australian dollar lost more than one US cent this morning after the US Federal Reserve said it would maintain a commitment to keep interest rates near zero for a “considerable time” after finishing its easing program next month.

Rumours that the US Federal Reserve might not drop the phrase, ‘for a considerable time’ from its post meeting statement tomorrow morning, our time, saw the Aussie dollar rise to 91 cents, while Wall Street markets had a solid night.

The Reserve Bank has stepped up the level of its rhetoric on the housing boom – especially the high level of buying by investors – and the potential dangers to the Australian economy.

In a move that will be noticed the world over, especially among money managers, Calpers, America’s biggest public pension fund, has revealed plans to stop investing in hedge funds.

Sharemarket futures failed to react overnight Monday to a surge in the spot price of ion ore.

As expected the Aussie dollar fell yesterday, along with markets elsewhere. But the currency’s fall slowed overnight and the dollar was operating in a range between 90.20-30 this morning in early Asian trading.

Chinese factory output slowed to its weakest pace in nearly six years in August while property sales, retail sales and investment also cooled.

The phrase ‘unchartered waters’ is often overused, especially when it comes to developments in financial markets, but this week sees two events which hold the threat of sending markets very much into the unknown.

The Aussie dollar will come under more pressure today after losing three cents last week to touch six months lows, thanks to the weak production and investment data from China at the weekend, on top of the continuing strength of the US dollar ahead of the Federal Reserve meeting and the vote on Scottish independence.

The US Fed’s meeting and the Scottish independence vote will dominate the coming week here and around the world. Nothing much else will matter to investors as volatility returns to the forex and bond markets, while commodities drift lower and equities mark time.

Chinese consumer price inflation eased in August, well below the government’s target, to the slowest rate of growth in four months, a development not all that strange given the sharp recent fall in some commodity prices and in domestic food prices.