Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Powell Eases Taper Angst, Dollar Slips; China Stocks Stage Rebound

By XM Group (Trading Point )Market OverviewJul 29, 2021 06:36AM ET
Powell Eases Taper Angst, Dollar Slips; China Stocks Stage Rebound
By XM Group (Trading Point )   |  Jul 29, 2021 06:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
  • Fed cites “progress” but still a ways to go; September taper decision seen less likely
  • Dollar hits 4-week low as easing China panic further adds to downside
  • Asian equities bounce back but Facebook (NASDAQ:FB) earnings warning could upset Wall Street

Powell upbeat but in no rush to curtail QE

The Federal Reserve acknowledged it had made “progress” towards its goals as it kept policy unchanged on Wednesday. However, in his press conference, Chair Jerome Powell appeared in no rush to scale down the $120 billion in monthly asset purchases anytime soon. Saying “we’re a ways away from having had substantial further progress toward the maximum employment goal”, Powell suggested the Fed needs more data before it can decide about the timing of taper.

On raising interest rates, Powell again stressed this was “still a ways away” even as he disclosed that the July meeting was the “first deep dive” on the timing, pace and composition of any tapering. However, despite the reluctance to commit to a timeline, the Delta variant wasn’t high on Powell’s list of concerns and it’s becoming increasingly evident that the Fed is just biding its time until it knows more about whether or not the surge in inflation is transitory and how far it can push the recovery in the labour market in the meantime.

All this implies September is too soon for the Fed to reach a decision on tapering and the focus is fast shifting to December.

Dollar skids as downside pressures intensify

Treasury yields dipped slightly after Powell’s as dovish as ever remarks, erasing the small spike posted on the back of the headlines of “progress” from the FOMC statement. But the US dollar’s slide post the press conference was more pronounced as investors pushing back their expected timing of a taper move was not the only thing dragging the currency lower. Subsiding jitters about China additionally weighed on the greenback as the associated risk aversion faded somewhat on Thursday.

The dollar index was in danger of slipping below the 92.0 level as it fell to 4-week lows. The yen also extended its losses as sentiment improved.

The pound was again a notable gainer on Thursday, making its way above $1.39, while the commodity-linked dollars finally managed to generate some positive momentum, with the kiwi leading the way.

China jitters ease but is the earnings boom over in the US?

Chinese authorities stepped in late on Wednesday to calm market nerves after days of crackdowns on local tech companies and private education firms. The blue-chip CSI 300 index lost almost 8% of its value before finally stabilizing on Wednesday. The benchmark index was up nearly 2% today after Chinese regulators held calls with banks and brokerages on Wednesday night to reassure investors that other industries will not come under the firing line and that Chinese companies can still apply to be listed in the US.

Stocks across Asia were in the green today, led by Hong Kong’s Hang Seng index (+3.3%). Europe had a strong open too, getting an extra lift from upbeat earnings announcements. However, US stock futures were struggling on Thursday, with Nasdaq futures bucking the trend to stand marginally in negative territory.

A warning by Facebook about slowing revenue growth in the second half of the year has dampened the mood on Wall Street even as the company reported stronger-than-expected results on Wednesday. (NASDAQ:AMZN) is the next tech giant to report its earnings after today’s closing bell and there’s a risk its results could further fuel concerns about future earnings growth prospects.

Ahead of that, the advance GDP report out of the US will be in the spotlight as the American economy is expected to have expanded by an annualized 8.5% rate in Q2.

Powell Eases Taper Angst, Dollar Slips; China Stocks Stage Rebound

Related Articles

JFD Team
U.S. And U.K. Retail Sales, EU CPI In Focus By JFD Team - Sep 17, 2021

Yesterday, the US released a few important economic data sets, which overall showed decent results. During the early hours of the European morning, the United Kingdom released its...

Jeffrey Halley
Get Out There And Shop By Jeffrey Halley - Sep 17, 2021

Americans got out there and answered that shopping call overnight, as US Retail Sales for August surprised to the upside, climbing 0.70% versus an expected fall of -0.70%. Markets...

Powell Eases Taper Angst, Dollar Slips; China Stocks Stage Rebound

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email