So long as a central bank decides to hold interest rates at a chosen level and is prepared to provide liquidity to any bank that requires it, the central bank stands in the market to offer unlimited quantities of money at the stated rate.
After a back injury forced him to re-evaluate his Olympic dreams, Ben Davies found a new thrill in the competition of trading. Now
managing a long-only gold fund, he strives to protect investors’ wealth while advocating for free market reforms around the globe.
When the U.S. Federal Reserve embarked upon the policy of asset purchases (known as “Quantitative Easing”) in the wake of the 2008 credit freeze, the goal was to stimulate the economy by keeping longer term interest rates low.
The U.S. Federal Reserve appears ready to begin tapering just as other central banks may be adding to their balance sheets. What will this mean for the global forex market? And remember, this is all data-dependent.
Brazil’s real gained the most in a month after the central bank stepped up efforts to arrest the world’s worst currency decline, announcing a $60 billion intervention program involving currency swaps and loans.
Brazil’s real declined for a fifth day as concern the Federal Reserve will reduce stimulus overshadowed the central bank’s plan to begin rolling over more than $5 billion in currency swap contracts today.