Monetary stimulus is no longer needed | 23 Junio 2023

23 Junio 2023, EUR/USD

EURUSD trading plan:

The Federal Reserve and the European Central Bank may mop up as much as 90% of the money they pumped into banks over the last decade now that high inflation and interest rates make that extra liquidity unnecessary, a paper by a Fed economist showed. The world's two largest central banks have been raising interest rates at a brisk pace to fight inflation and unwinding some of their massive bond purchases, which flooded banks with cash when price growth was sluggish and borrowing costs already at zero. U.S. Treasuries and German government bonds command a premium on the market because of their liquidity and safety, meaning banks have less of an incentive to swap them for deposits at the central bank.

Investment idea: sell 1.0950 and take profit 1.0880.

David Johnson
Analyst of «FreshForex» company
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