Home›Forex›Major Pairs›Dollar softens after Fed holds rate target, futures pr…

Dollar softens after Fed holds rate target, futures price fewer hikes

After a 9-3 vote to keep the target range at 3.50% to 3.75%, pricing for at least two additional increases by 9 December fell to about 42% from 57%.

Reported · Written up by our desk · Major Pairs

The Federal Reserve held its target range at 3.50% to 3.75% in a 9-3 vote, with three members preferring an immediate quarter-point increase, and FXStreet said the result left the US Dollar Index weaker rather than stronger.

The US Dollar Index slid in the hour after the decision, moving away from a session high just below 101.50 and trading near 100.90, even though pre-meeting expectations had largely positioned the outcome as the hawkish tail that could support the dollar and weigh on risk assets.

FXStreet attributed the dollar's reaction partly to the Fed's messaging, noting the statement offered no forward guidance and the meeting did not include the Summary of Economic Projections, leaving only the briefing at 18:30 GMT as the day’s forward-looking signal.

The update also pointed to changes in interest-rate pricing across the curve, with at least one increase by 16 September now priced near 64% versus roughly 80% before the meeting, and at least two increases by 9 December falling to about 42% from 57%, implying a flatter tightening path than traders had been anticipating.

Latest closeDollar index 101.39 ▼0.1%

More like this

Sources