Dollar Index Hits 5-week Low

The dollar index extended its losses to around 100.3 on Thursday, its lowest level in about six weeks, after falling 0.6% in the previous session. Investors continued to assess the latest FOMC decision and Fed Chair Warsh's press conference. As expected, the Fed left the federal funds rate unchanged, although three FOMC members voted in favor of a rate hike. While Chair Warsh reiterated the Fed's commitment to bringing inflation under control and stressed that policymakers would not hesitate to act if necessary, he was not among those advocating an immediate increase and refrained from providing clear forward guidance. As a result, investors further scaled back expectations for an imminent rate hike and increasingly viewed the central bank as merely postponing what they see as an inevitable increase in borrowing costs. The implied probability of a 25-basis-point hike in September has fallen to around 55%, down from nearly 80% before the Fed's decision.

DXY decreased to 100.35, the lowest since June 2026. Over the past 4 weeks, Dollar Index lost 1.01%, and in the last 12 months, it increased 0.4%.

The dollar index fell below 100.8 on Thursday, extending the previous session's 0.6% decline to its lowest level in about two weeks, as investors continued to assess the latest FOMC decision and Fed Chair Warsh's press conference. As expected, the Fed left the federal funds rate unchanged, although three FOMC members voted in favor of a rate hike. While Chair Warsh reiterated the Fed's commitment to bringing inflation under control and stressed that policymakers would not hesitate to act if necessary, he was not among those advocating an immediate increase and refrained from providing clear forward guidance. As a result, investors increasingly viewed the central bank as merely postponing what they see as an inevitable rate hike. The implied probability of a 25bps increase in September has fallen to around 63%, down from nearly 80% before the Fed's decision. However, additional US strikes against Iran helped limit the dollar's losses by boosting demand for safe-haven assets.