US Dollar Stumbles as America Enter a Technical Recession


Despite losing ground following the US Fed interest rate announcement and poor GDP reports, the US dollar regained a bullish countenance on Thursday, pushing close to the 107.00 level. This rebound comes after the greenback fell to the 106.05 mark in the Asian session today, its lowest point since July 5.

According to the data released by the US Bureau of Economic Analysis, America’s Gross Domestic Product (GDP) fell by 0.9% annualized rate in Q2 2022. This was a significant deviation from the widely-expected 0.5% increase forecasted by analysts.

That said, the latest report suggests that the US is technically in a recession, after posting two consecutive quarterly GDP contractions. This comes as the US Fed fights aggressively to curb rising inflation in the county.

Commenting on the report, Mazen Issa, a senior FX strategist at TD Securities, explained: “For now, the market is running with the idea that slowing growth will cause the Fed to blink and that we’re entering a recession.” Issa further noted that “the challenge here is that in order to get a weak dollar, you need a strong euro, and that is not going to happen given the headwinds facing Europe.”

US Dollar Fell on Wednesday Following Unsurprising Rate Hike

The dollar fell on Wednesday after the US Fed announced a 75 basis point (bps) rate hike on Wednesday, which had already been priced in by capital markets, sparking a rally in risk assets. Furthermore, Fed Chair Jerome Lowell’s comments at the FOMC meeting triggered hopes of a less aggressive hike campaign in the coming months.

Commenting on the dollar’s performance, Francesco Pesole and Frantisek Taborsky of ING FX explained in a note:

“Yesterday’s long-squeeze is not a sign of a longer-lasting soft period for the dollar, in our view. Upside risks for the greenback remain material due to an unstable global risk environment and still broadly supportive Fed stance.”


You can purchase Lucky Block here. Buy LBlock

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit

Highly volatile unregulated investment products. No EU investor protection.

  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.