Forex Today: Dollar up after the Fed, ahead of historically low US GDP, stimulus talks eyed

Here is what you need to know on Thursday, July 30:

The market mood is somewhat downbeat and the dollar is edging higher as investors digest the dovish Fed stance. Second-quarter growth figures take center stage and they will likely be disastrous. 

Fearful Fed: The Federal Reserve left its policy measures unchanged and stressed that uncertainty is high and the path forward depends on the virus. The Fed reiterated its commitment to do whatever is needed but did not provide details and urged lawmakers to do more.

Jerome Powell, Chairman of the Federal Reserve, acknowledged that the rise in COVID-19 cases in mid-June caused economic data to soften. The dollar initially dropped, sending EUR/USD above 1.18 and GBP/USD to top 1.30, before the move reversed. 

See FOMC and Chairman Powell: Doing the Covid limbo

US coronavirus deaths have topped 150,000 with daily mortalities surpassing 1,400 on Wednesday. The number of new cases has flattened at under 70,000. 

Fiscal stimulus: Days ahead of the expiration of several extraordinary measures to support the economy, Democrats and Republicans have yet to strike a deal. Senate majority leader Mitch McConnell expressed hope to reach an agreement on Friday while others were less optimistic. The federal top-up of $600 per week is the main sticking point. 

Initial jobless claims are set to move up for the second consecutive week while continuing claims are forecast to edge lower. Markets will focus on the first release of Gross Domestic Product for the second quarter – projected to show a historical crash of 34.1%. A wide array of estimates and the unprecedented nature of the illness leave room for surprises and high volatility. 

See US Q2 GDP Preview: Are there any shocks left?

Gold prices have been consolidating their gains around $1,960 after testing the highs around the Fed decision. Traders are eyeing the $2,000 level and various banks see further gains on the cards. 

Germany also reports its GDP figures for the second quarter, with a fall of 9% on the cards. Europe's largest economy weathered the pandemic better than most of its peers. Berlin also reports inflation and employment data. EUR/USD is hovering above 1.17.

GBP/USD is pressured under 1.30 after a failed attempt to move higher. The British government is scheduled to provide updates on coronavirus regulations later in the day.

AUD/USD has been on the back foot amid dollar strength and increases in COVID-19 cases in Australia which are in the high hundreds and spreading beyond Victoria. Building Approvals missed with a drop of 4.9% in June. 

USD/JPY is trading above 105, rising amid dollar strength, and as the number of coronavirus infections in Tokyo and other cities is edging higher. 

Cryptocurrencies have been consolidating their gains, with Bitcoin slipping below $11,000 and XRP losing the $0.24 level.