On August 20, 2021, the following was reported by ABC News:

"By 4:30pm AEST, the Australian dollar had plummeted to 71.3 US cents, which was a 1.3 per cent drop in a day. The local currency slumped to its weakest level since early November. It has also dropped 7 per cent since the year began.

It comes after the US dollar surged on bets the Federal Reserve may start winding back its stimulus measures within months."

Using the demand-supply model of exchange rate determination, explain why the news of Federal Reserve sizing down economic stimulus as above would lead to an immediate depreciation of the Australian dollar.