U.S. central bank’s asset purchases | 02 tháng Tám 2021

02 tháng Tám 2021, GBP/USD

U.S. central bank’s asset purchases

GBPUSD trading plan:

The U.S. financial system is swimming in about $4 trillion in reserves, which are rising in part because of the U.S. central bank’s asset purchases, the drop in Treasury bill issuance and a rapid drawdown in the government’s store of funds at the Fed. The Treasury General Account has dropped by more than $1 trillion since last fall. Bankers now have a lot of capital; they don't know what to do with it. Against this background, bankers are involved in reverse repo transactions with the Fed. Such operations are carried out only during periods of excess liquidity. Volume at the U.S. Federal Reserve’s reverse repurchase facility topped $1.03 trillion on Friday for the first time.

Investment idea: buy 1.3890 and take profit 1.3950.

David Johnson
Analyst of «FreshForex» company
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