Dollar Holds Drop After Fed Decision

2026-07-30 01:08 By Jam Kaimo Samonte 1 min. read

The dollar index held below 101 on Thursday after a sharp decline in the previous session, as the Federal Reserve left interest rates unchanged despite mounting inflationary risks stemming from renewed conflict in the Middle East.

Still, three FOMC members dissented in favor of a rate hike, while Chair Kevin Warsh stressed that the decision to hold rates steady should not be viewed as a sign of policy inertia, adding that markets would continue to respond to incoming economic data.

In the Middle East, the US was reportedly carrying out fresh air strikes on Iran following attacks on American forces in the region.

Meanwhile, both sides remained unable to reach a potential agreement as Tehran insisted on maintaining control of the Strait of Hormuz, leaving traders concerned about inflation and the interest rate outlook.

Elsewhere, the Bank of England and the Bank of Japan are also widely expected to keep interest rates unchanged this week.



News Stream
Dollar Holds Drop After Fed Decision
The dollar index held below 101 on Thursday after a sharp decline in the previous session, as the Federal Reserve left interest rates unchanged despite mounting inflationary risks stemming from renewed conflict in the Middle East. Still, three FOMC members dissented in favor of a rate hike, while Chair Kevin Warsh stressed that the decision to hold rates steady should not be viewed as a sign of policy inertia, adding that markets would continue to respond to incoming economic data. In the Middle East, the US was reportedly carrying out fresh air strikes on Iran following attacks on American forces in the region. Meanwhile, both sides remained unable to reach a potential agreement as Tehran insisted on maintaining control of the Strait of Hormuz, leaving traders concerned about inflation and the interest rate outlook. Elsewhere, the Bank of England and the Bank of Japan are also widely expected to keep interest rates unchanged this week.
2026-07-30
US Dollar Index Extends Pullback
The dollar index fell to 101.2 on Wednesday, extending the pullback after testing a 15-month high of 101.6 on the prior session after the Federal Reserve held interest rates unchanged. Around one-third of the market had positioned for a hike by the central bank, as mounting pro-inflationary risks and the backdrop of a strong labor market supported the case for hawks in the FOMC. Accordingly, three members of the committee dissented in favor of a hike. The pullback in the dollar took place despite a fresh surge in oil prices as strikes between the US and Iran magnified the risk of a prolonged energy shortage from the Middle East. The implication of higher energy prices on interest rates was transmitted to other G10 currencies later in the month, with soaring natural gas prices supporting the euro and the yen. In turn, the sterling extended its outperformance this year ahead of a likely Bank of England hold.
2026-07-29
Dollar Eases Ahead of Fed Policy Decision
The dollar index held slipped to around 101.4 on Wednesday, sliding for the second straight session as investors cautiously awaited the Federal Reserve’s upcoming policy decision, where it is expected to leave interest rates unchanged. However, markets continue to price in about a one-third chance of a 25-basis-point rate hike, reflecting an unusually high level of uncertainty this close to a decision compared with recent years. Traders also see roughly an 80% probability of a rate increase in September, reinforcing expectations that borrowing costs could stay elevated. Meanwhile, investors also monitored rebounding oil prices and renewed inflation concerns after fresh hostilities flared in the Middle East. The US military said it had successfully intercepted what it described as a surprise Iranian attack targeting US troops stationed across the Middle East, reigniting regional tensions.
2026-07-29