Fed establishes temporary USD swap lines to lessen strains in USD funding markets

The US Federal Reserve announced that it has established temporary USD swap lines with Australia, Brazil, Denmark, Korea, Mexico, Norway, New Zealand Singapore and Sweden.

"Swap lines will be in amounts up to $60 bln each for Australia, Brazil, Korea, Mexico, Singapore and Sweden," the Fed said. "Swap lines will be in amounts up to $30 bln for Denmark, Norway and New Zealand."

The Fed further noted that swap lines are designed to lessen strains in global USD funding markets in response to coronavirus.

Market reaction

The US Dollar Index, which tracks the USD's performance against a basket of six major currencies, stays near 101.80 after this announcement, still adding 0.85% on the day.