AUD Lower Before Fed Minutes As USD Strengthen On Further Tapering Bets

The Australian dollar weakened versus its major peers amid speculation the U.S. Federal Reserve will continue to reduce stimulus that has buoyed asset prices around the world.

The Aussie held its biggest decline in three weeks against the greenback before minutes are released of the Fed’s meeting last month, when policy makers decided to begin tapering bond purchases. A gauge of construction activity in Australia declined in December, a report today showed. The nation’s currency traded near a five-year low versus its New Zealand counterpart.

“Fed policy and a stronger U.S. dollar will likely drive the Aussie lower,” said Janu Chan, an economist at St. George Bank Ltd. in Sydney. “There’s a key risk tonight with the minutes. Our view is that there’s enough strength in the U.S. economy to warrant tapering throughout most of 2014.”


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu