US Dollar Index

The US Dollar (USD) has come under renewed downside pressure on Thursday, receding to three-day lows while market participants assessed the ECB’s interest rate decision and kept monitoring developments from the Middle East crisis.

USD/JPY trades little changed on Thursday as the Japanese Yen (JPY) underperforms most of its major peers, although a softer US Dollar (USD) keeps the pair from gaining much ground. Traders remain cautious ahead of the Bank of Japan’s (BoJ) monetary policy announcement on Friday.

OCBC’s Sim Moh Siong and Christopher Wong note that the Federal Reserve’s pause keeps the Dollar supported but limits sustained upside. They expect a final 25bp hike in December, while underlying inflation and global policy moves, including an ECB hold, shape the outlook.

The US Dollar (USD) remains in a consolidation phase after the Federal Reserve’s decision to keep interest rates on hold, with market attention shifting directly toward key economic data releases.

Brown Brothers Harriman’s Elias Haddad notes the Dollar has partly recovered after the FOMC kept the Fed funds range at 3.75–4.00% in a 10–2 vote, with dissenters favoring a hike. Warsh’s press conference signaled little urgency to tighten, yet December odds remain high. Upcoming US PCE and GDP data will gauge the Fed’s scope to stay patient and sustain USD-supportive rate differentials.

Gold (XAU/USD) trades on the back foot on Thursday as the Federal Reserve’s (Fed) latest monetary policy announcement leaves a December hike firmly in play after the US central bank keeps interest rates steady at its October meeting.