Forex Today: Powell pummels the dollar with patient call, all eyes on US GDP

Here is what you need to know on Thursday, July 29:

The dollar is down after the Fed seems to be in no rush to taper bond buys, providing support to stocks and gold. The first release of US GDP is in the spotlight on Thursday. Covid continues spreading in the US and also bumping up in the UK. Cryptocurrencies have stabilized on higher ground. 

Tapering can wait: The Federal Reserve has left its policy unchanged as expected and said it would consider adjusting its bond-buying scheme in "coming meetings." It continues seeing inflation as transitory and Fed Chair Jerome Powell characterized "substantial further progress" in the labor market as still "a ways off." 

While Powell seemed less worried about the economic impact of the Delta covid variant, he refused to provide any comment about the Fed's next big even – the Jackson Hole Symposium. With the lack of urge to decrease the bank's $120 billion/month purchases of bonds, the dollar dropped sharply across the board.

• FOMC : The statement giveth and Powell taketh away
• Fed Analysis: Powell only takes a baby step toward tapering, why the dollar could dive

EUR/USD is hovering around 1.1860, the highest in two weeks and as coronavirus cases continue moving up in the old continent. Germay's employment figures are eyed. 

GBP/USD is hovering well above 1.39, the highest since June, despite a bump up in covid cases in the UK, breaking a seven-day streak of drops. Nevertheless, UK infections are off the peak. 

In stock markets, Facebook's results and projections somewhat disappointed, but Chinese authorities continue easing pressures on tech companies after Beijing's crackdown on several firms early in the week. The overall mood in global markets is positive. AUD/USD is trading closer to 0.74.

USD/CAD is changing hands below 1.24, benefiting from the risk-on mood, and the rise of WTI Crude Oil to around $73 and after Canada reported mixed results. 

The highlight of the day is America's first release of Gross Domestic Product data for the second quarter. Economists expect bumper annualized growth of 8.6%. 

See US Q2 GDP Preview: Economy to continue to expand at strong pace, eyes on FOMC

Deal: A bipartisan group of Senators and the White House reached an agreement on a $1 trillion infrastructure spending bill. The legislation still has additional hurdles to pass and Democrats are already mulling an additional, larger package. 

Cryptocurrencies have been consolidating their gains, with Bitcoin clinging to $40,000 and Ethereum around $2,300. 

More Analyzing inter-market correlations to see if reflation trade is coming to an end – July 2021