MUFG’s Derek Halpenny highlights that the Federal Reserve’s decision to leave rates unchanged, and Chair Warsh’s failure to clearly justify the pause, triggered a sell-off at the long end of US Treasuries and modest Dollar weakness.

TD Securities strategists note that the US Dollar (USD) weakened after the July Federal Open Market Committee (FOMC) rate hold and Chair Warsh’s lack of hawkish guidance.

MUFG’s Derek Halpenny says the Fed’s decision to hold rates, combined with Chair Warsh’s unclear justification, steepened the Treasury curve and weakened the dollar. Rising inflation expectations and concerns over Federal Reserve (Fed) credibility now point to further depreciation risk.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is gaining ground after two days of losses and trading around 101.00 during the European hours on Thursday.

ING’s Chris Turner notes that US real yields and the US Dollar (USD) fell after a confusing FOMC press conference, as markets sensed the Federal Reserve (Fed) may avoid further tightening.

The US Dollar (USD) trades slightly positive in the Asian session on Thursday after a juggernaut fall the previous day. At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.12% higher to near 100.92.

The Federal Reserve left its target range at 3.50% to 3.75% at 18:00 GMT, three voting members dissenting in favour of an immediate quarter-point increase. Equities bought the hold and ignored the split, the index adding roughly 200 points in the minutes after the headline to trade near 52,100.

The Federal Reserve held its target range at 3.50% to 3.75% at 18:00 GMT on a 9-3 vote, with three voting members preferring an immediate quarter-point increase.

A 9-3 vote held the federal funds target range at 3.50% to 3.75% at 18:00 GMT, the three dissenters all preferring an immediate quarter-point increase.

Scotiabank strategists Shaun Osborne and Eric Theoret note the US Dollar (USD) is narrowly mixed to softer ahead of the Federal Open Market Committee (FOMC), with swaps pricing a modest chance of a hike but the bank seeing that risk as much lower.

The Dow Jones Industrial Average trades just above 51,800 on Wednesday afternoon, down roughly 900 points and 1.7% from Tuesday's close. The session high just above 52,800 printed before 09:00 GMT, and the tape has sold in one near-continuous line ever since.

BNY’s Geoff Yu notes that USD exposure is elevated across global portfolios, with strong buying in both equities and bonds generating sizeable rebalancing signals. The bank recommends increasing FX hedges instead of selling U.S. assets, as hedge ratios remain low and Dollar allocations high.

BNY’s Geoff Yu notes the US Dollar (USD) enters the Federal Open Market Committee (FOMC) with strong recent demand but stretched positioning, as cross-border buying and late-July spot demand remain supportive.

ING strategists Francesco Pesole and Frantisek Taborsky expect the Federal Reserve to keep rates unchanged, with two dissenters possibly voting for a hike, limiting downside in front-end USD rates.

The US Dollar (USD) stands at a critical juncture as financial markets prepare for the Federal Open Market Committee's (FOMC) upcoming interest rate announcement.

Dow Jones futures gain 0.11% to trade around 53,000 during European trading hours on Wednesday. Meanwhile, S&P 500 futures rise 0.16% to trade near 7,480, though Nasdaq 100 futures decline 0.17%, trading near 27,870, respectively.

Geoff Yu at BNY reports that global equity allocations have reached a record share of portfolios, with United States (US) markets dominating both equity and fixed-income holdings.

The US Dollar (USD) trades marginally lower in the European trade on Wednesday, reflecting caution ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.

MUFG’s Lloyd Chan expects the Federal Open Market Committee (FOMC) to deliver a hawkish hold, with the Federal Reserve (Fed) keeping rates unchanged while stressing elevated inflation risks. He notes softer recent US data but highlights that markets still price some probability of a July hike.

The United States Dollar Index (DXY), which tracks the Greenback against a basket of currencies, is seen consolidating below the 101.50 level during the Asian session as traders await the outcome of a two-day FOMC meeting, due later this Wednesday.

The Dow Jones Industrial Average trades just short of 52,900 on Tuesday, higher by close to 700 points and 1.3%, roughly 450 points beneath the record it set in the first week of July. Taken alone, that reads as a broad risk rally.

The Greenback, when tracked by the US Dollar Index (DXY), abandons the area of monthly peaks and recedes toward the 101.30 zone on turnaround Tuesday.

MUFG’s Lee Hardman notes the US Dollar (USD) has reversed early-week losses and is trading near year-to-date highs ahead of tomorrow’s Federal Open Market Committee (FOMC) meeting.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground after three days of gains and trading around 101.50 during the Asian session on Tuesday.

On Monday, US President Donald Trump grabbed the headlines as investors awaited monetary policy meetings by three of the eight major central banks, led by the Federal Reserve, the Bank of England, and the Bank of Japan.

The Dow Jones Industrial Average trades near 52,200, up around 250 points, after a session that handed it the month's cleanest bullish catalyst and then took most of it back.

BNY’s Geoff Yu says softer June Consumer Price Index (CPI) has reduced immediate inflation concerns, but limited Fed guidance continues to support policy uncertainty and US Dollar (USD).

MUFG’s Lee Hardman notes the US Dollar has softened as Middle East tensions ease and Brent Oil retreats below USD90, reducing energy-driven inflation fears. The correction in energy prices has slightly lowered market-implied odds of a near-term Fed rate hike.

Brown Brothers Harriman’s (BBH) Elias Haddad expects a hawkish Federal Reserve (Fed) hold and a goldilocks-like United States (US) macro backdrop to keep the US Dollar (USD) supported in coming days.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground after posting minor losses in the previous trading day, trading around 101.20 during the Asian session on Monday.