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

Dollar Edges Lower; Fed Meeting, GDP Data Due This Week

ForexJul 26, 2021 03:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The dollar edged lower in early European trading Monday, but remained at elevated levels ahead of this week’s important policy meeting by the U.S. Federal Reserve.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 92.885, just below the 3 1/2-month high of 93.194 seen last week. 

USD/JPY fell 0.2% to 110.34, GBP/USD edged lower to 1.3741, EUR/USD gained 0.1% to 1.1778, while the risk-sensitive AUD/USD fell 0.2% to 0.7348.

This week’s key event is the two-day meeting of the Federal Reserve, concluding on Wednesday. There isn’t expected to be a change in policy at this meeting, but the central bank could provide more clarity over when it will start to taper its massive bond-buying program, in the light of above-trend economic growth and inflation.

“While it may not specify exactly when it is ready to taper, the tone should generally support the view that tapering should emerge in 4Q this year, with the possibility of a first hike coming in 4Q22,” said analysts at ING, in a research note.

There are also a number of important U.S. data releases due this week that should illustrate the economy's strong performance. In particular, the second-quarter gross domestic product is forecast on Thursday to show annualized growth of 8.6%, a sharp jump from 6.4% in the previous quarter.

The risk to this optimism comes from the surge in U.S. Covid-19 cases. This largely occurred after the Fed’s last meeting in the middle of June, although the vaccination program appears to have broken the link between cases and hospitalizations for the vaccinated population.

The number of infections from the Delta variant continue to rise globally, with China reporting its highest number of cases since the end of January, while new infections have also spiked in Japan, where Tokyo is currently hosting the Olympics.

Numbers are also rising in Europe, but the Eurozone should still see an improvement in its second-quarter GDP data this week, with Friday’s numbers expected to show a 1.5% quarter-on-quarter expansion, as the region exits its technical recession.

However, the single currency may remain under pressure after falling against the dollar last week to the lowest since early April. The European Central Bank edged closer to taking a more dovish stance toward inflation, shifting its forward guidance such that a hike in interest rates looks unlikely until as far out as 2024.


Dollar Edges Lower; Fed Meeting, GDP Data Due This Week

Related Articles

Bitcoin, ether slump as market selloff widens
Bitcoin, ether slump as market selloff widens By Reuters - Sep 20, 2021 1

By Gertrude Chavez-Dreyfuss and Saikat Chatterjee NEW YORK/LONDON (Reuters) -Cryptocurrency prices sank on Monday as concerns over the spillover risk to the global economy from...

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