Weekly Market Update (24 May 2021) – Hawkish FOMC minutes indicates possible discussions on QE tapering in upcoming meetings.
ByLCMS Traders FX Analysis Team
MAY 22, 2021
(1) In the released meeting minutes by the Federal Reserve last Thursday, it was stated that several FOMC committee members felt appropriate to hold discussions on making adjustments to the pace of quantitative easing during the upcoming meetings if the U.S. economy continues to make robust recovery. Note that this set of minutes is for the monetary policy meeting held before the recent string of economic data releases with mixed results. As a result of the hawkishness from the FOMC, U.S. dollar strengthened against the other major currencies.
(2) The Australian Bureau of Statistics (ABS) reported a 30,600 jobs decline in April as a result of the cessation of the JobKeeper wage subsidy programme on 28 March. The Australian dollar weakened at the time of the data release but recouped its losses eventually as the loss of jobs was forewarned by the Reserve Bank of Australia last month.
(3) The U.S. Preliminary PMI data released by Markit showed that overall business activities in the U.S. has once again expanded at the fastest rate ever since data collection started in October 2009. Output from the manufacturing sector increased in pace amid stronger client demand.
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