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Currency Market Analysis

Jul 08, 2021 | Currency Market Analysis

Global Themes

USD jumps as Fed sees taper “earlier than expected”

The USD was stronger overnight as last night’s Federal Reserve minutes signalled the US central banks was likely to withdraw stimulus earlier than expected.

The Fed said it would begin discussions on tapering its bond buying program within the next few meetings with market commentators suggesting the program could be reduced from their November or December meetings.

The US dollar index hit new three-month highs on the news.

Major FX weaker

The euro and British pound both fell as the USD gained.

The AUD was also weaker.

The Japanese yen extended recent gains.

RBA speech

The focus quickly switches back to local monetary policy with Reserve Bank of Australia governor speaking 10.30am AEST.

Chinese new loan data will be closely watched with the Chinese government signalling plains to provide further support to the economy.

Later, ECB minutes are due.

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