Dollar Remains Soft Ahead of Fed Decision

USD

The dollar index, which measures the greenback against a basket of major currencies, continued to trade near 93.50, its lowest level since June 2018, ahead of the Federal Open Market Committee meeting. The Fed kicked-off a two-day meeting yesterday, to decide on the monetary policy. Investors aren't expecting a change in policy. Despite a push higher in economic activity in May and June, the soaring coronavirus cases in the United States will continue to build downside risks to the economic recovery, and force the Federal Reserve to adopt an ultra-loose monetary policy for an extended period. On the other hand, the success of avoiding a second wave until now in Europe is making it more attractive. The EURUSD extended upside rally, trading at $1.1770, the GBPUSD rose to $1.2970, the highest since March 10, and the USDJPY declined to 104.81.

Metals

Gold prices hovered near $1950 backed by woes over the economic recovery, which boosted the bets over further stimulus. The continuous spread of the Coronavirus could disrupt the economic activity again and trigger more stimulus packages. The price of a silver ounce is trading above $24, while palladium futures eased to $2355.

Oil

Oil prices continued to trade in a tight range awaiting fresh fundamental drivers. The volatility is significantly low where the width of the Bollinger bands with period 20 and deviation 2, on the daily chart, dropped to the lowest since early January. The West Texas Intermediate crude September delivery traded near $41.38, and Brent Blend September delivery rallied to $43.63.

Major Economic Events

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