FX.co ★ Dollar Holds Losses on Fed Uncertainty

The US Dollar Index hovered around 102.1 on Thursday, extending the previous session’s losses after the Federal Reserve left interest rates unchanged, as widely anticipated, while offering little guidance on its next policy steps. Fed Chair Kevin Warsh also signaled that the central bank may cut the number of annual interest-rate decisions from eight to six, adding another layer of uncertainty for markets. At the same time, two officials dissented in favor of a 25-basis-point rate increase, reinforcing expectations for a possible hike in December amid stubborn, energy-driven inflation. Investors are now looking ahead to the US PCE price index, the Fed’s preferred inflation measure, for clearer indications on the future trajectory of monetary policy. Market attention is also shifting to upcoming decisions from the European Central Bank and the Bank of Japan, with both institutions widely expected to keep interest rates unchanged.