The Australian dollar is slightly higher as traders wait for an announcement on whether the US Federal Reserve will wind down its economic stimulus measures.

At 1700 AEST on Monday, the local unit was trading at 96.21 US cents, up from 95.94 cents on Friday.

On Thursday morning Australian time, the US central bank’s Federal Open Markets Committee (FOMC) will finish up its two-day meeting, with most market participants hoping there will be an announcement on its economic stimulus program, known as quantitative easing (QE).

The release of a string of positive US economic data recently has sparked talk that the Fed would taper the program and that has seen the Australian seven lose US cents against a surging US dollar in six weeks.

Forex.com research analyst Chris Tedder said the outcome of the FOMC meeting will be a turning point for the Australian dollar.

“Rumours suggest the aim of the meeting will be to calm the market,” he said.

“However, if the bank lets slip that it’s planning on tapering asset purchases sooner rather than later, then money may scramble into the US dollar.

“The Fed is unlikely to be so direct, thus the market will likely be closely monitoring the tone of the bank.”

On Tuesday the Reserve Bank of Australia will release minutes of its June 4 board meeting, where it kept the cash rate unchanged at a record low of 2.75 per cent.

Focus will be on whether the RBA is likely to cut the cash rate another one or two more times this year after making a quarter of a percentage cut at the May meeting.

“In saying that, we aren’t expecting the bank to deviate very far from what RBA governor Glenn Stevens said after the rate decision earlier this month, where he reiterated that growth remains a bit below trend and the effects of previous easing is still finding its way into the real economy,” Mr Tedder said.