FOREX-Dollar stops digging as investors turn to Congress for stimulus

* No dovish surprise from Fed helps dollar bounce
* Eurozone confidence surveys eyed as virus stalls U.S.
recovery
* Yen firm amid worry about U.S. fiscal package, China
tension
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, July 30 (Reuters) - The dollar caught a little
support on Thursday after the Federal Reserve offered no real
clues about its next moves, beyond an expected pledge to keep
policy easy as a fresh surge in coronavirus infections stalls
the U.S. economic recovery.
That was a letdown to some dollar bears who had speculated
the Fed might loosen its approach to inflation, something they
now think could happen at its next meeting in September.
The dollar index =USD bounced about 0.4% from a two-year
low and the Australian dollar retreated about 0.7% from a
15-month top touched on Wednesday. AUD/
The yen JPY= dipped 0.3% to 105.24 per dollar, but edged
higher on other majors as the mood stayed pretty cautious and
focus turned to forthcoming U.S. and European data and a U.S.
fiscal rescue package which is bogged down in Congress.
"Excitement running into the Fed meeting has died down after
the meeting turned out very much as expected, and the dollar is
slipping in to a bit of a trading range," said Moh Siong Sim,
currency analyst at the Bank of Singapore.
"Some sort of consolidation is due after the dollar weakness
we've seen over the past one or two weeks."
Fed Chair Jerome Powell called out recent weakness in
high-frequency employment data as evidence that a new wave of
coronavirus cases was weighing on recovery and indicated more
fiscal support would help when asked what more could be done.
That has investors nervously eying Congress' impasse and
likely to be looking even closer at the latest weekly jobless
numbers due at 1230 GMT.
Advance quarterly GDP data due at the same time will likely
be one for the record books, with economists anticipating a 34%
drop in annualised economic output last quarter. APART
German GDP growth due at 0800 GMT is also expected to be
ugly, but it is the apparent divergence in fortunes between
Europe and the United States that has weighed so heavily on the
dollar in recent weeks.
Eurozone sentiment surveys due at 0900 GMT are expected to
show a strong rebound and could give the common currency a
boost.
The euro EUR=EBS slipped 0.3% to $1.1745 on Thursday, but
it has gained 4.7% against the dollar in July, which has it
within range of posting its best month in a decade.
"We expect European confidence figures to support our view
of the economic divergence between the eurozone and the U.S. and
that supports further gains in euro," said Carol Kong, FX
analyst at the Commonwealth Bank of Australia in Sydney.
Elsewhere nervousness about global tensions with China
dragged on risk sentiment and added to pressure on the
Antipodean currencies. The Australian dollar AUD=D3 was 0.8%
softer at $0.7132 and the kiwi NZD=D3 slipped 0.7% to $0.6623.
Sino-U.S. relations have deteriorated sharply over issues
ranging from the pandemic to Beijing's territorial claims in the
South China Sea and its clampdown on Hong Kong.
That has weighed on the yuan, which has been all but left
behind as the dollar has slumped, and was a fraction weaker on
Thursday at 7.0055 CNH= . CNY/
China is also lagging behind agricultural purchases promised
under January's trade deal. Elsewhere, the Turkish lira hit a record low against the
euro EURTRY= , and is under pressure against the dollar on
rising concerns over depleted reserves and local demand for
dollars despite state efforts to stabilise trading. (Reporting Tom Westbrook in Singapore. Additional reporting by
Hideyuki Sano in Tokyo; Editing by Sam Holmes and Lincoln
Feast.)