Dollar little changed post Fed

The dollar is little changed this morning post yesterday’s Fed meeting, trading a touch north of $1.17 and $1.29 against the euro and sterling respectively (albeit it did hit fresh lows immediately following the conclusion of the meeting), which leaves the euro-pound rate still hovering just below 91p. Equity markets in the US closed in positive territory yesterday but European indices ended flat, while core bond yields edged lower

The Fed left policy on hold as widely expected, noting that “following sharp declines, economic activity and employment have picked up somewhat in recent months”, but said it remained “committed to using its full range of tools to support the US economy in this challenging time”

The Fed said that, looking ahead, “the path of the economy will depend significantly on the course of the virus, adding that “the 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”

Data due later today are expected to show GDP in the US fell by almost 9% in the second quarter (from the first) according to the consensus forecast, although as noted by the Fed, within this activity probably bottomed in the opening month of the quarter (April) before partially recovering in the following two months

Other data scheduled for today include unemployment and the Economic Sentiment Indicator in the Euro area