Home›Forex›Major Pairs›Dollar slips as investors doubt Fed hike path after Wa…

Dollar slips as investors doubt Fed hike path after Warsh comments

The US Dollar Index was near 100.7 after dropping from about 101.0 earlier, with September rate hike odds at 63% per CME FedWatch.

Reported · Written up by our desk · Major Pairs

The US dollar reversed early gains in European trading, with the US Dollar Index, which tracks the greenback versus six major currencies, down 0.1% to about 100.70 after falling from an intraday high near 101.00, according to FXStreet.

FXStreet said selling pressure built as investors questioned whether the Federal Reserve will hike rates soon amid concerns over US inflation. The Fed held rates steady Wednesday in the 3.50% to 3.75% range and warned about upside inflation risks, while Fed Chair Kevin Warsh said the central bank is committed to bringing inflation down.

The report also pointed to market uncertainty around the Fed’s inflation-fighting credibility, noting that Warsh’s rhetoric had not translated into a clear policy signal. FXStreet cited Brown Brothers Harriman’s Elias Haddad, who said the dollar dropped because markets pared back residual odds of a July hike and found Warsh’s inflation messaging insufficiently credible as policy guidance.

Separately, the article referenced CME FedWatch data showing the odds of a September rate hike at 63%, leaving the dollar unable to regain traction despite the Fed’s hawkish hold.

Latest closeDollar index 100.80 ▼0.6%

More like this

Sources