The Federal Reserve is printing dollars and that makes the currency more attractive, contrary to instincts but with good reasons behind it in the opinion of FXStreet’s analyst Yohay Elam.
Key quotes
“The Fed’s open-ended commitment to buying US bonds allows the government to splurge cash and support the economy. Higher government demand is set to strengthen the economy and is therefore positive for the dollar.”
“Investors have many more dollar-denominated assets to buy. By removing risk, investors from all over the world may stock up on corporate debt, almost of any kind. And that is dollar-positive.”
“Without additional tools to weaken the dollar by the Fed, it has nothing left to deter investors to buy dollars if they want to. And the longer the crisis runs, the higher the demand for the greenback.”
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