Funding to counter coronavirus and its vast economic impact keeps the underlying currencies bid, contrary to logic in normal times, FXStreet’s analyst Yohay Elam reports.
Key quotes
“Central bank support is needed to fund trillions worth of programs that are crafted on the move. Without monetary backing, the ‘bond vigilantes’ would flee from bonds, choking countries with high borrowing costs.”
“Money printing is good for stabilizing the economy – and therefore for the underlying currencies as well.”
“Coronavirus is already triggering layoffs or unpaid leave and more layoffs are likely coming. With people out of jobs, there is a low risk of runaway inflation.”