EUR/USD: Echoes from Powell's speech to continue pummeling the dollar

EUR/USD has been rising in the aftermath of Powell's dovish message. Further responses to the Fed, US data and coronavirus news are set to move markets as well, Yohay Elam, an analyst at FXStreet, reports.

Key quotes

“Powell laid down a new policy framework prioritizing reaching full employment at the expense of letting inflation overheat. Powell and his colleagues at the Fed will also allow consumer prices to exceed the 2% target for one year in order to compensate for past low inflation. While the news has no immediate policy implications – the Fed pledged low rates through 2022 – it implies lower borrowing costs for far longer.” 

“Investors continue shrugging off the increase in the old continent's coronavirus cases. Spain remains the leader in the grim contest and France is also in the spotlight after Parisians were ordered to wear face masks in all public places.”

“US COVID-19 infections are sloping downward, but deaths continue mounting at a worrying pace – passing the 180,000 threshold. Nevertheless, investors are steering the immense efforts to develop a vaccine and Abbott Laboratories' announcement of developing a rapid test – promising a result within 15 minutes and at a cost of $5.”

“Friday's economic calendar features US Personal Income and Personal Spending for July – with both figures set to be more stable than in recent months. The federal government's massive fiscal stimulus kept Americans' income high through July.”