Dow Jones Soars, US Dollar Drops as Fed Announces Huge Loan Program
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US Dollar Analysis & News
The Federal Reserve looks to have stolen the show once again, completely overshadowing the initial jobless claims data, after announcing further measures to provide up to $2.3 trillion in loans in order to support the economy ultimately providing a credit backstop.
- Main Street Lending Program: Enhancing support for small and mid-sized business with purchases of up to $600bln worth of loans.
- Municipal Liquidity Facility: Helping local and state governments manage cash flow stresses through lending as much as $500bln to states and municipalities.
- Expanding the size and scope of the Primary and Secondary Market Corporate Credit Facilities (PMCCF and SMCCF) as well as the Term Asset-Backed Securities Loan Facility (TALF), where these three programs will now support up to $850bln in credit.
- Supplying liquidity to participating financial institutions through term financing backed by PPP loans to small businesses
Market reaction: In reaction to more unprecedented action by the Federal Reserve, the US Dollar dropped across the board with EUR/USD breaking above 1.0900, while US equity futures and gold pushed higher. (Gold trading like a risk asset)
Dow Jones Price Chart: 1-Minute Chart
Source: IG Charts
US Dollar Price Chart: 1-Minute Chart
--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.