US Treasury and Fed working against the dollar

06.04.2021

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On the first trading day of the week, the dollar basket index lost 0.5%. On Thursday, April 1, I noted the fact that in the next two months the US Treasury will increase the number of dollars in the banking system through operations to redeem Treasury bonds, and the competitors of the dollar have a great opportunity to compensate for the positions which were lost in March. This process is steadily starting and will gain momentum.

Today the US Treasury will redeem bonds in the amount of $5 billion, and on Thursday for another $14 billion. The Federal Reserve will print $13.8 billion on the remaining days of the week to buy assets. Therefore, the Ministry of Finance and the Federal Reserve will “pour” liquidity into the system in the amount of $45.6 billion this week. Let me remind you that last week there was an outflow of capital in the amount of $117.6 billion.

Investment idea: Buy 1.1785/1.1760 and take profit 1.1848.