US Dollar Drifts Higher..

The dollar drifted higher against developed-market peers but gave up gains against emerging currencies in early trading in Europe on Friday, as the market digested the Federal Reserve’s pledge to inject $1.5 trillion in reserves into the financial system late on Thursday.



The Fed also announced that its already-scheduled injection of reserves through T-bill purchases would now take place along the whole Treasury yield curve, in an effort to ease budding liquidity problems in the world’s benchmark risk-free asset. Analysts described that move as the start of “QE4” – a fresh round of quantitative easing that President Donald Trump has already called for.

By 5:30 AM ET (0930 GMT), the dollar index, which measures the greenback against a basket of currencies, was essentially flat at 97.45. It was up 1.3% against the Japanese yen at 105.95 and unchanged against the safe haven Shttp://ericavillalon.strikingly.com/blog/making-a-career-in-forex-like-erica-villalonwiss franc, but down slightly against the euro and sterling. More on FX @ericavillalon53

Markets had been confused on Thursday by the European Central Bank’s reluctance to cut interest rates and by President Christine Lagarde’s inflammatory comment that “we are not there to close spreads,” a remark that caused heavy selling in Italian government bonds. The ECB subsequently walked back the comments but the German-Italian yield spread has stayed at elevated levels.By 5:30 AM ET, it was still at 247 basis points.  Daily Thoughts @https://slides.com/ericavillalon/profitable-forex-trading-with-erica-villalon#/
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Erica Villalon Fx Desk

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