Dollar demand higher as Fed signal dovish outlook

USD

Wednesday evening saw the eagerly anticipated Federal Reserve press conference take place, and their economic outlook has seen investor concerns rise as the dollar strengthened against riskier currencies. It was also projected that US interest rates would likely stay near zero for the foreseeable future.

Federal Reserve policymakers predict that the US economy will shrink to 6.5% this year and the unemployment rate will be at 9.3% by the year end, fueling concerns by many that this will not be a simple v-shaped recovery for the wider global economy. This led on to Fed Chair Powell describing the path of interest rates as a “long road” and that a hike was not close to being considered.

Key announcements

13:30 – USD – Initial Jobless Claims (Jun); expected to decrease to 1550K from previous 1877K