The Australian dollar has plunged, falling more than one US cent in overnight trade in the wake of the US Federal Reserve’s move to lift its benchmark interest rate by a quarter of one per cent.

At 0800 AEDT on Thursday, the local unit was trading at 74.09 US cents, down from 74.89 cents on Wednesday and sharply lower than its level above 75 US cents ahead of the Fed’s announcement at 0600 AEDT.

The US Federal Reserve lifted its benchmark interest rate by a quarter of one per cent to a range of 0.5 to 0.75 per cent – its first move in a year.

The Fed also signalled three likely hikes in 2017, up from two previously.

Westpac senior market strategist Imre Speizer said the indication of three increases was a surprise.

“The Fed hiked by 25 basis points, which was widely expected, but also raised its interest rate projection which was not expected,” Mr Speizer said in a note.

“Markets reacted by pushing bond yields and the US dollar higher.”

Traders will also be watching Australian employment figures due out today, with no change expected to the jobless rate of 5.6 per cent.

The median forecast is for the number of Australians with a job to have risen by about 20,000 in the month, after lifting by 9,800 in October, according to an AAP survey of 14 economists.