Forex Today: Fed passes with little notice ahead of Q2 GDP
|Here is what you need to know on Thursday, July 30:
The dollar maintained the sour tone heading into the US Federal Reserve announcement, the most relevant event of the day. The central bank kept its monetary policy unchanged as expected, with small changes to the statement.
Chief Powell’s speech saw the greenback seesawing between gains and losses. Among other things, he said that “high-frequency data is showing that the pace of the recovery looks like it has slowed since mid-June,” providing temporal support to the American currency, which anyway resumed its decline afterwards. He also referred to “critical” fiscal support for economic recovery.
The EUR/USD pair pierced 1.18 while GBP/USD advanced beyond 1.30 with the news. The USD/JPY pair posted a lower low, ending the day little changed around 105.00.
Commodity-linked currencies showed a late reaction to the Fed, but also advanced, backed by resurgent oil prices. The bright metal settled around $1,9670 a troy ounce. Oil remained within familiar levels.
Asian and European indexes closed the day mixed around their opening levels. Wall Street, however, managed to close the day with gains. US Treasury yields remained depressed near weekly lows.
Coronavirus: The number of global coronavirus cases has surpassed 17 million, while the death toll surpassed 665K, with over 150K deceased just in the US. The country has reported more than 1,200 daily deaths in the past 24 hours, for the first time since May, although the number of new cases week-over-week fell for the first time since June.
The focus is now on the preliminary estimate of the US Q2 GDP, which is foreseen plummeting to a record low of -34.1% as a result of the ongoing pandemic. Probably the main reason while the greenback remains on the selling side.
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