Is QE Enough To Stop USD Strength?

With the FED introducing an unlimited QE program and the US government pledging US$2.6 trillion to support the economy, the USD hasn’t seen the upside one would expect during these uncertain times. But that might be about to change.
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In the midst of the worst economic downturn in a century some equity markets put in their best month since 1987.

Some analysts think this is due to the markets forward-looking nature by looking past the slowdown towards the recovery. Others think it’s due to the short-term euphoria from policy measures and easing of lockdown restrictions.

Either way, we’ve seen the recent positive tones, alongside FED policy action keep USD demand at bay, for now. However, there are some risk events on the near-term horizon which could spark some negative risk flows and bring back USD’s safe-haven appeal.

As always, it’s never just one thing but a combination of factors that influence and drives the markets, and this week we have a few that could see some interesting moves across asset classes.

This week ahead video will help you prepare for this week’s upcoming events and provide insights into how you could possibly trade it as well.

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Highlights of the video:

00:43 – Current Baseline

03:49 – Baseline expectations for the upcoming risk event

07:42 – Possible sentiment shifts

11:10 – Possible currency pairs to consider

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