The Australian dollar was opened in 0.7483 to the USD. That was happened on yesterday sale and still near the lowest record for multi-month. Last time they were in that position on June. 

The AUD / USD was jump to 0.7599 after the tapering released by the Australian Central Bank or RBA yesterday. However, then it felt back again only in few hours after that situation. 

The RBA announcement was coldly responded by the market participants who are anticipating the minutes release of The Fed policy this night. It is awaited by them. 

In a policy meeting held yesterday, the RBA decided to cut its obligation purchase speed from AUD 5 billion to AUD 4 billion per week. That decision will be used until the 11 of November. 

RBA Starts the Tapering

The RBA starts the tapering because the economy condition is still strong and the outlook is better. It is although the coronavirus infection and the area quarantine is coming to Australia again. 

That institution noted in their statement that the jobless rate is declining again to 5.1 percent in May 2021. The amount of the Australian citizen who have a job is now more than the pre-pandemic era. 

The RBA governor, Philip Lowe, said that one of the short-term uncertainties is the effect of COVID-19 pandemic and lockdown lately. However, there is one thing to note. 

Usually, the economi will be recovered soon after the pandemic is handled and the social restriction is loosened. That decision triggers many things in the future. 

The Quantitative Easing Can Be Ended

That decision opens a possibility for the RBA to end their quantitative easing faster than the expectation. They may start to increase the interest rate earlier. 

The Westpac Economist leader, Bill Evans, said that the decision is tighter than their expectation. In the future, Westpac predict about the RBA asset purchasing program. 

It seems that their will end that on 2022. After that it will be continued by the interest rate increase on March 2023. Westpac also predict that the Fed America will announce their tapering. 

That may be started in September 2021 with the stage from January up to in the middle of 2022. This analyst projection is more hawkish than the official RBA projection. 

The Interest Rate May Remains Until 2024

The Australia’s Central Bank thought that the interest rate will still remain until 2024. It is still unsure that the decision will be in line with the official projection made by the Fed. 

The market is still difficult to decide which central banks that will start to increase their rate first. In a short-term period, the Fed opinion is maybe having more effect in the market. 

The dovish plan switch to become a hawkish to the Fed representatives can push the AUD / USD pair. It is although the RBA starts their tapering earlier than the expectation. 

Elsewhere, if the FOMC minutes fails to support the Fed hawkish plan, the AUD / USD has a chance to move higher. That is the biggest possibility to note so far. 

Meanwhile, the US Dollar Moves Higher

The US dollar moved higher in a Tuesday trading session after it was hit by the employment rate last week. When this news written, the index of USD was increasing by 0.42% to 92.62.

That stopped the decline happened two days before. The investors are getting ready for the hawkish possibility in a FOMC minutes. That is giving a good support for the US dollar now. 

The disappointing PMI service data in America is also failed to tams the bullish. ISM reported that the America service industry activity is declining from 64.0 to 60.1 in June. It is lower than the expectation.