US Fed Reserve announces “modest” taper; Tourism sector grows in 2012-13; Aussie dollar drops amid US easing: Midday Round

The United States Federal Reserve will begin easing stimulus from January, as yesterday it was decided that the economy had improved enough to begin winding back its bond buying program.

Next month there will be a “modest” $10 billion reduction, as the Fed will buy $US75 billion in bonds, in contrast to the current $US85 billion a month it’s spent for the past year.

The decision was made yesterday by the US Federal Open Market Committee following a two-day policy meeting.

“In light of the cumulative progress toward maximum employment and the improvement in the outlook for labour market conditions, the Committee decided to modestly reduce the pace of its asset purchases,” the FOMC said in a statement.

“If incoming information broadly supports the committee’s expectation of ongoing improvement in labour market conditions and inflation moving back toward its longer-run objective, the committee will likely reduce the pace of asset purchases in further measured steps at future meetings.”

Tourism sector grows in 2012-13

The tourism sector has grown faster than national figures thanks to rises in domestic and international tourism consumption of 3.4% and 5.7% respectively, according to Australian Bureau of Statistics figures released today.

While GDP growth was 2.4% in 2012-13, direct tourism GDP increased by 3.7% to 42,255 million.

Tourism employment as a share of total employment grew by 0.1% to 4.7% and hours worked in tourism increased by 1%.

Aussie dollar drops amid US taper

A day of turbulent Australian dollar values has followed the US Federal Reserve’s announcement it would scale back bond buying.

The Aussie dollar fell to a three-year low of 0.8819 US cents before regaining some ground to 88.70 US cents this morning, OZ Forex reports.

“We expect a range today of 0.8840 – 0.8920,” the currency exchanger said on its website.

Shares open higher

Aussie shares have opened up this morning, following a record-breaking day on Wall Street.

The S&P/ASX200 benchmark was up 47.3 points to 5143.4 at 11:56am AEDT. Overnight the Dow Jones closed 292.71 points higher, up 1.84% to 16,167.97.