'Tapering' is an absolute term encountered daily in forex trading. It is a strategy used by the Federal Reserve to reduce the amount of money in circulation. The term refers to removing the quantitative easing measures adopted by the Federal Reserve and other central banks to boost their economies. When we talk of tapering, the government has slowed down its asset purchases, including mortgage securities and treasury bonds. Tapering helps slow down inflation as the amount of money in circulation becomes limited. Tapering is a strategy used in a strong economy that does need the Central Bank's help. Of course, investors become drawn toward buying a currency once the government embarks on tapering since its supply will start shrinking.