US Dollar Analysis & News
- Federal Reserve Steals the Show with Huge Loan Program
- US Dollar Drops, While Dow Jones Soars
The Federal Reserve looks to have stolen the show once again, completely overshadowing the initial jobless claims data, after announcing further measures to provide up to $2.3 trillion in loans in order to support the economy ultimately providing a credit backstop.
- Main Street Lending Program: Enhancing support for small and mid-sized business with purchases of up to $600bln worth of loans.
- Municipal Liquidity Facility: Helping local and state governments manage cash flow stresses through lending as much as $500bln to states and municipalities.
- Expanding the size and scope of the Primary and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF) as well as the Term Asset-Backed Securities Loan Facility (TALF), where these three programs will now support up to $850bln in credit.
- Supplying liquidity to participating financial institutions through term financing backed by PPP loans to small businesses
Full Fed Announcement
Market reaction: In reaction to more unprecedented action by the Federal Reserve, the US Dollar dropped across the board with EUR/USD breaking above 1.0900, while US equity futures and gold pushed higher. (Gold trading like a risk asset)
Dow Jones Price Chart: 1-Minute Chart
Source: IG Charts
US Dollar Price Chart: 1-Minute Chart
— Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX