European session review: USD weakens as coronavirus spike in the U.S. dashes recovery hopes and lawmakers remain apart on new stimulus

USD fell against most other major currencies in the European session on Wednesday as a spike in COVID-19 cases in the U.S. dashed hopes for quick economic recovery, while congressional lawmakers remained apart on the next COVID-19 stimulus legislation.

Six U.S. states reported one-day records for coronavirus-related deaths on Tuesday and nationwide cases stayed high, adding to concerns that the resurgence of coronavirus infections could trigger the reimposition of restrictions in the weeks ahead. Overall, deaths in the country increased to 149,260, the most in the world, according to the Johns Hopkins Center for Systems Science and Engineering. The U.S. has 4,352,304 cases of COVID-19, also the most in the world. 

In addition, market participants are awaiting the outcomes of the meeting of the Federal Reserve (due at 18:00 GMT). The central bank is not expected to make any major changes to its monetary policy stance and markets expect the Fed to signal it remains supportive of the economy as the country struggles in its fight against the COVID-19 pandemic. At its June meeting, the Fed left its interest rates unchanged and said it expects to hold the target range for the federal funds rate at the current level at least through 2022 or until the economy “had weathered recent events.”