U.S. Dollar Falls Sharply As Fed Powell Maintains Dovish Tone
28 Julio 2021 - 11:11PM
RTTF2
The U.S. dollar came under pressure in the Asian session on
Thursday, after Federal Reserve Chair Jerome Powell rejected the
likelihood of an immediate tapering of the bond buying program,
saying that the economy is "still a ways off" from reaching a
standard of "substantial further progress" to withdraw stimulus
measures.
The Fed noted that the economy has made progress towards its
goals for inflation and labor market since the June meeting, but
the threshold to begin tapering bond purchases has not been
achieved.
Powell said that inflation has increased notably and would
likely remain elevated in coming months before moderating.
Regarding job growth, the Fed chief remarked that "there is
still a long way to go" to consider a shift in policy.
The U.S. Senate voted to push forward a bipartisan
infrastructure plan amounting to $550 billion, which includes
funding for roads, bridges, broadband and other physical
infrastructure.
The five-year spending package would be paid for using COVID-19
relief funds, illegally paid unemployment benefits during the
crisis and unutilized federal unemployment funds.
U.S. GDP data for the second quarter, due at 8:30 am ET, is
expected to show an annualized growth of 8.5 percent, up from 6.4
percent in the previous quarter.
The greenback weakened to 1.3950 against the pound, its lowest
level since June 24. The greenback is likely to test support around
the 1.42 level.
The greenback dropped to 2-day lows of 109.68 against the yen
and 0.6986 against the kiwi, down from Wednesday's closing values
of 109.91 and 0.6955, respectively. The greenback is seen
challenging support around 108.00 against the yen and 0.72 against
the kiwi.
The greenback slipped to more than a 2-week low of 1.1870
against the euro and a fresh 2-week low of 1.2472 against the
loonie from yesterday's closing values of 1.1843 and 1.2521,
respectively. The greenback is poised to find support around 1.21
against both the euro and the loonie.
The greenback that closed Wednesday's trading at 0.9100 against
the Swiss franc and 0.7374 against the aussie depreciated to a
1-1/2-month low of 0.9080 and a 6-day low of 0.7395, respectively.
The greenback may face support around 0.88 against the Swiss franc
and 0.77 against the aussie.
Looking ahead, U.K. mortgage approvals for June, German jobless
rate and Eurozone economic confidence index for July are set for
release in the European session.
At 8.00 am ET, Destatis is scheduled to issue Germany's flash
consumer prices for July.
U.S. GDP data for the second quarter, pending home sales for
June and weekly jobless claims for the week ended July 24 are due
in the New York session.
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