For some time the Federal Reserve has been buying back Freddie Mac’s and Fannie Mae’s debts, together with high quality mortgage backed securities. Now a decision has been made to buy out long term government bonds worth 300 billion US Dollars in the upcoming six months. This decision caused the rapid depreciation of the American currency and the EURUSD noted an increase of 8 cents to the level of 1.37. This was also backed by the worse than expected macroeconomic data from the US economy, as industrial production fell by 1.4% against an expected fall by 1.2% and base inflation which rose by 0.2% against an expected increase by 0.1%. The “honor” of the American economy was saved by some extent by the better than expected readings from the real estate market.
The above mentioned factors had a positive effect on the Polish currency, which also strengthened against the US Dollar, being also pushed by better than expected readings from industrial production and the PPI. What has to be underlined is that industrial production noted an increase by 2.7% against an expected decrease by 16.6%.
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