Fiat currencies across the globe have experienced sharp declines in the wake of the coronavirus panic, with the Norwegian Krone falling over 30% lately last week. The Mexican peso and Australian dollar trailed close behind over the same period, with multiple fiat currencies also taking a nosedive. Though USD remains strong, some speculate this is due to flight from other markets, and that the bastion of fiat strength might not be able to withstand endless printing and reckless credit creation of QE much longer.
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Announcing an open-ended QE program Monday for unprecedented asset purchasing, the U.S. Federal Reserve has pledged to purchase assets “in the amounts needed,” signaling the beginning of a virtually unlimited easing effort which will include moving into corporate bonds for the first time.
As lockdown orders, enforced business closures and travel bans continue to wreck economies, world currencies are reeling from the massive shock spiked by coronavirus panic and containment measures. The Fed and other central banks of the world may have their eyes on unlimited support, but many fiat currencies are telling a different story.