The Fed is in favor of devaluating the dollar

Morning Stock News

Gold   1961,10
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EURUSD   1,1764
( -0,23%)

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At the meeting on Wednesday the Fed management unanimously decided to keep the key rate in the range of 0.00-0.25%. This was expected. Everyone was waiting for comments, which will follow after the announcement of the meeting results. Fed promised to use all instruments to support American economy. The interest rates will be around zero for a long time. Unemployment situation in the US is a separate concern.


EUR/USD

Once again, everyone is convinced that every month the market will be filled with more unsecured dollars. Remembering how much debt Americans have, the following suspicion sneaks in. Perhaps the Fed wants to artificially cause dollar inflation to reduce the size of government debt in relation to the GDP.


Euro

The EU has also adopted an unprecedentedly large economic assistance programme worth over €4 trillion. However, this is still less than in the USA. That is why the EUR continues to grow steadily. Of the last 9 trading days, the European currency has grown 8 times. This has not happened for a long time. And this indicates the strength of the trend.


Pound Sterling

The English currency, which we haven’t remembered for a long time, surpassed the important level of 1.30 on Wednesday. Now the way up is open, without significant resistance on the daily chart, up to the level of 1.35.
What can stop the growth of the pound? Theoretically, if the second coronavirus wave begins to develop, the British currency will fall first against the EUR and the Swiss franc. But against the U.S. dollar, almost no analysts expect a strong correction.


What’s waiting for us today?

10:00 German GDP for 2nd quarter
11:00 EU unemployment rate for June
14:00 Harmonized Consumer Price Index in Germany for July
14:30 Annual US GDP figures for the 2nd quarter


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