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2025-09-18 16:34:28
[The US Dollar Index retreated to around 97, with markets focused on the Fed's cautious rate cut signals.] ⑴ During Thursday's European session, the US Dollar Index (DXY) retreated to around 97.00, erasing its intraday gains as the market awaited US initial jobless claims data later in the day. ⑵ The US dollar had previously benefited from strong inflation expectations, dampening market expectations for further aggressive rate cuts from the Fed. This week, the Fed lowered the federal funds rate by 25 basis points, its first rate cut of the year. The latest State of Economic Projections (SEP) suggests another 50 basis point cut is possible this year, slightly higher than forecasted in June. ⑶ Chairman Powell emphasized that this rate cut was a "risk management measure" primarily aimed at addressing the sluggish labor market and stated there was no urgent reason to accelerate the pace of easing. New Governor Miran had previously supported a larger 50 basis point rate cut, narrowing the committee's disagreement to expectations. ⑷ The Franklin Templeton Institute noted that the Fed's lack of a clear path for rate cuts may disappoint the market, and its cautious approach has further reinforced investors' conservative stance.
