Positive news from China and Fed's unprecedented QE measures put pressure on the dollar (we expect AUD/USD pair to grow and

The US dollar does not respond to unprecedented measures of stimulating the US economy, which in recent weeks have been extended almost indefinitely in recent weeks by the initiatives of the Federal reserve and the US Treasury Department.

So on Monday, the Fed announced the purchase of assets without restrictions to support the financial market. The content of these programs is expressed in the purchase of assets in accordance with quantitative easing measures (QE). In addition, there is already a program for business lending to companies aimed at maintaining their creditworthiness. There will also be many new incentive measures. For the first time, the regulator will switch to the purchase of corporate bonds by purchasing investment-grade securities in both the primary and secondary markets through exchange-traded funds. It can be recalled that earlier after the crisis of 2008-09, the Fed did not resort to such measures during three programs of quantitative easing.

At the same time, the Central Bank has already launched a number of programs since yesterday. But so far, there has been no clear reaction in the markets. Everyone is so passionate about the coronavirus that they just don't want to notice it, although it seems to us that this state of affairs will continue until the situation with the spread of coronavirus in Europe and the USA is stabilized. In this case, the market sentiment will begin to change one hundred and eighty degrees. The US dollar will be hit hard, and the demand for the company's shares will begin to grow exponentially as the news arrives on the market, similar to those that are coming from China. There, the disease has already begun to diminish, and the local economy is recovering.

Today, the news from the "middle Kingdom " that the country opens its borders tomorrow has led to the growth of the local stock market. In general, Asian major stock indexes are noticeably adding. South Korean is growing by more than 8%, Japanese by 7%, and Chinese continental indices are adding at the moment, from about 2 to 3%. Meanwhile, US and European stock index futures are also trading more than 4%. We expect that trading in Europe will open with rising indices, and the United States expects the same.

Now, let's go back to the currency market. In the wake of China's positivity, the dollar is under pressure across the entire spectrum of the market for major currencies. In the wake of the positivity, we believe that it will remain under local pressure today from both the side of the Fed's announcement of "infinite" QE and news from the PRC, which show that the virus is receding in Asia.

Forecast of the day:

The AUD/USD pair is growing on positive news from Asia and the demand for risky assets. It has already rolled back up 38% Fibonacci and is trading above the level of 0.5945. We believe that consolidation above this level will lead to its local increase to 0.6080.

The USD/CAD pair is trading below the level of 1.4425 amid rising oil prices and general positivity from Asia. We believe that on this wave, it has the prospects of declining to the level of 1.4200, and then to 1.4030.



The material has been provided by InstaForex Company - www.instaforex.com