Fed minutes signaled to taper by year-end, pushing USD to the 9-month high

The meeting minutes on Fed’s meeting from July 27-28 have been released. During the meeting, Fed officials commented that the asset purchasing program might be eased if the economy continues to improve as expected. The earliest tapering might come at the 2021 year-end. Although there is still some room for improvement to reach the maximum employment goal, the tapering signal has pushed USD to its 9-month high against EUR, AUD, and NZD.

In Australia, the labor participation rate has dropped to 66%, indicating that fewer people are looking for work during lockdowns. Because of this, the unemployment rate fell from 4.9% in June to 4.6% in July, because fewer people are participating in the labor market. AUDUSD fell sharply, currently trading at 0.7183. The downtrend is also attributable to the rising USD.