* Dollar index down 0.383%<\/p>\n
* U.S. economy grows solidly in Q2 but misses forecasts (Adds analyst comments, updates prices)<\/p>\n
NEW YORK, July 29 (Reuters) – The dollar fell to a one-month low on Thursday, a day after the U.S. Federal Reserve said the job market still had \u201csome ground to cover\u201d before it would be time to ease monetary stimulus, taking the steam out of a monthlong rally by the greenback.<\/p>\n
The dollar index, which measures the greenback against a basket of six other currencies, was down 0.383% at 91.905, its lowest since June 29.<\/p>\n
The euro gained 0.35% against the dollar, to 1.1885.<\/p>\n
\u201cThe dollar\u2019s reign over the euro appears over as the Fed appears nowhere near tapering as the economy slowly makes its way to achieving substantial progress in the labor market,\u201d said Edward Moya, senior market analyst for the Americas at OANDA.<\/p>\n
The index, which is still up 1.6% since the Fed\u2019s June meeting, after a hawkish shift from the U.S. central bank, found little support from U.S. gross domestic product numbers released on Thursday.<\/p>\n
Data showed that while the U.S. economy grew solidly in the second quarter, boosted by massive government aid, growth fell short of economists\u2019 expectations.<\/p>\n
GDP increased at a 6.5% annualised rate last quarter, the Commerce Department said on Thursday, well below the 8.5% rate economists polled by Reuters had forecast.<\/p>\n
\u201cWith the dollar already under pressure today as the risk environment stabilises and markets embrace the dovish rhetoric from Fed Chair (Jerome) Powell yesterday, the near-2-percentage-point miss in Q2 GDP did little to relieve the greenback,\u201d said Simon Harvey, senior FX market analyst at Monex Europe.<\/p>\n
U.S. Treasury yields trended lower after Wednesday\u2019s Fed statement, with inflation-adjusted real yields tumbling to a new low, weighing on the U.S. currency. .<\/p>\n
\u201cShould the yield curve continue to slowly steepen with risk appetite remaining in place, dollar bearishness could accelerate in the coming weeks,\u201d said OANDA\u2019s Moya.<\/p>\n
The market took Wednesday\u2019s Fed announcement as a positive for risk as it leaves the lower-rates-for-longer scenario intact, said Brad Bechtel, global head of FX at Jefferies.<\/p>\n
\u201cCombined with soothing commentary from Chinese officials on what their intentions are regarding IPOs in the U.S. and this regulatory crackdown they embarked on … markets were set up for a nice little rally last night,\u201d he said.<\/p>\n
China stepped up attempts to calm frayed investor nerves after a wild markets rout this week by telling foreign brokerages not to \u201coverinterpret\u201d its latest regulatory actions.<\/p>\n
The Australian and New Zealand dollars, reliant on world and Chinese economic growth, rose 0.33% and 0.7% respectively.<\/p>\n
The U.S. dollar\u2019s weaker tone and a fall in coronavirus cases in Britain helped lift the British pound to its highest in over a month against the dollar.<\/p>\n