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US Dollar Extended Losses After FOMC. Will Q2 GDP Add Some Pressures On Greenback?

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The Federal Reserve left the target range for its federal funds rate unchanged at 0-0.25 percent on July 29th 2020 as expected.

Policymakers warned that ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.

In press conference, Chairman Jerome Powell noted that there are signs the increase in infections is starting to weigh on activity while noting that the path forward for the economy is “extraordinarily uncertain.”

While the FOMC was happy to stay the course, we will be getting some interesting data out today, that will likely give us a bit more of an idea of what we are dealing with.

According to Powell, this will be the worst GDP reading ever. Investors are worried about GDP but their primary concern is what happens after extra unemployment benefits are replaced with a program that barely meets the needs for most Americans.

Regarding USD, a further recovery seems likely, although we expect the currency to find further offers at key levels of resistance as the overall bias remains bearish.

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