The U.S. dollar fell for the third consecutive day on Wednesday. Earlier, the Fed’s optimistic policy statement stated that despite the increase in new crown infection cases, the economy is recovering, but the statement did not set a timetable for the Fed to reduce asset purchases. The U.S. dollar fell mostly against G-10 currencies, only rising against the New Zealand dollar and the Japanese yen; the yield on the 10-year US Treasury bond fell from an intraday high after Powell’s speech, at 1.23%, basically unchanged. The Norwegian Krone and the Canadian dollar led the G-10 currency gains due to rising oil prices and an important commodity price index.

The U.S. dollar index fell 0.23% to 92.27, rose to 92.77 after the Federal Reserve statement was released, and then fell back. James Marple, senior economist at TD Economics, said that the Fed’s statement hinted at discussions about reducing the scale of large-scale asset purchases, but did not commit to any future plans other than continuing to evaluate the situation. We expect that there will be more intense discussions at the Jackson Hole Summit at the end of August. The plan to reduce debt purchases may be reflected in the September statement, and new economic forecasts will be announced at that time.

The euro rose against the US dollar for the third consecutive day, rising 0.24% to 1.1845 in late trading, and fell to 1.1789 earlier; on Thursday, the 1.6 billion euro option with a strike price of 1.1850 expired, and the gains were slow before then. The euro was nearly flat against the pound at 0.85134 pounds; earlier it fell to 0.84999, the weakest since April. Citi Lauren Jung said in the report that if the euro against the pound falls below the short-term pivot at 0.8504, it may further fall to the support range of 0.8472 to 0.8473. The euro fell 0.2% against the Swiss franc to 1.0780 Swiss francs, the lowest level since January.

The pound rose 0.17% to 1.3902, close to a two-week high, and analysts attributed its strong tone to the decline in new confirmed cases of new crowns in the UK in the past seven days.

The US dollar fell 0.59% to 1.2528 against the Canadian dollar; it briefly fell below the July 21 low of 1.2526 during the session, but stopped at 1.2516 on the upward trend line; pay attention to the 1.2519 where the 21-day moving average is located.

The Australian dollar rose 0.19% to 0.7376 against the US dollar, hitting its lowest point since July 21 earlier; the New Zealand dollar fell 0.10% to 0.6949 against the US dollar.

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