As the US steps up its fight against COVID-19, the Fed introduced unlimited QE and announced a USD300bn funding package to support households and businesses. The dollar responded well to the announcement, economists at ANZ Research apprise.
Key quotes
“Key measures announced Monday include buying unlimited amounts of Treasuries, MBS and CMBS and USD300bn in financing to large corporates, SMEs and households.”
“In times of crisis, the US dollar’s reserve currency status and global demand for dollar funding make the US’s situation somewhat different from other current account deficit countries.”
“We will be watching to see if the post GFC experience of QE will hold for the USD as the fiscal expansion unfolds.”
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