Fed Urgently Cut Interest Rate

The US dollar strengthened against a basket of major currencies on Friday. The dollar index (#DX) closed in the green zone (+1.33%). However, today the US currency is declining sharply. Yesterday, the US Federal Reserve urgently reduced the base interest rate to zero and announced the launch of a large-scale program of quantitative easing. The regulator lowered the rate to 0-0.25%, announced plans to purchase additional government bonds $500 billion worth and guaranteed mortgage-backed securities of $200 billion. The Fed also called on banks to increase lending from existing reserves. These measures were taken in order to stabilize financial markets and support the US economy.

All are concerned about a flash of coronavirus. A number of countries around the world have announced a stricter regime as methods of combating a pandemic. In many countries, external borders are closed, and a ban on movement between different cities is introduced, except for special needs. Educational institutions, cinemas, theaters, museums, sports facilities, discos, pubs are closing.

China's economy has shown the worst figures over the past 30 years. Industrial production fell by 13.5% in February, while experts forecasted growth by 1.5%. Fixed investments collapsed by 24.5%. And the unemployment rate rose by 6.2% in China.

The "black gold" prices continued to fall. Currently, futures for the WTI crude oil are testing the $30.45 mark per barrel.

Market indicators

On Friday, shares in the US stock market started to recover: #SPY (+8.55%), #DIA (+9.43%), #QQQ (+8.47%).

The 10-year US government bonds yield fell again. At the moment, the indicator is at the level of 0.77-0.78%.

• Today, the publication of important news is not expected.

by JustMarkets, 2020.03.16

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.