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Central Banks · Forex · Interest Rates · US Dollar
The US Dollar Index (DXY) firmed near 100.80, a level not seen since May 2025, after the Federal Reserve (Fed) left interest rates unchanged at 3.50%-3.75% and removed its "additional rate adjustments" reference, while the Bank of England (BoE) also held rates at 3.75%, causing the British Pound to slip.
This Fed decision, made in Kevin Warsh’s first policy meeting as Fed Chair, reinforced a cautious, data-dependent stance, with Warsh signaling the need for greater confidence in inflation moving sustainably toward the 2% target. US Initial Jobless Claims fell by 4,000 to 226,000, meeting market expectations, though Continuing Jobless Claims rose to 1.81 million, indicating some softness among workers receiving benefits.
The US Dollar was strongest against the British Pound, gaining 0.65%. EUR/USD remained under pressure near 1.1460 as European Central Bank (ECB) officials warned about energy prices and inflation.
GBP/USD traded near a two-month low of 1.3210 after the BoE's 7-2 vote to keep rates steady, despite two members backing a hike to 4.00%. USD/JPY firmed to 161.40, a level not seen since July 2024, benefiting from renewed Greenback demand.
WTI Oil remained near $75.70 following a US-Iran agreement, while Gold struggled near $4,220 due to the strong Greenback, lower oil prices, improved risk sentiment, and firm US yields.
