Early Friday morning in Asia, Reuters came out with the news suggesting that the size of the US Federal Reserve’s balance sheet, on a weekly basis, shrank for the first time since February.
Key quotes
The Federal Reserve’s stash of assets shrank this week for the first time since February, reflecting a sharp drop in currency swaps with foreign central banks and a continued slackening in demand for other emergency credit facilities.
The size of the Fed’s balance sheet – composed of assets ranging from U.S. Treasury bonds and mortgage-backed securities to loans to banks and state governments – fell to $7.14 trillion on June 17 from $7.22 trillion a week earlier.
FX implications
The news should ideally offer additional strength to the US dollar. However, a lack of activity amid the initial Asian session restricts the market’s reaction. Even so, AUD/USD remains pressured around 0.6850 following the news.
Share
