The US dollar recorded a sharp decline after the last FOMC meeting signaled a 25 basis point interest rate cut by the Fed, in line with market expectations for the past few weeks.
At 10.30 am, the US Dollar Index (DXY) was at 98.378 points, flat since it opened early Friday in Asian trading.
The Fed's third consecutive 25 basis point (bps) interest rate cut continued to weigh on the US Dollar. The Fed lowered the federal funds rate range to 3.50%–3.75%, the lowest in three years, in a rare 9–3 vote with two members rejecting any cut, while another recommended a larger cut of 50 basis points.
In addition, the Fed also announced a monthly Treasury repurchase of $40 billion.
Market focus now shifts to US Initial Jobless Claims data, with the latest forecast at 220,000 versus 191,000 the previous week, while the four-week average rose to 214,750.
The weakening labor reading could confirm that the Fed may be a little behind the slowing economy.
Meanwhile, speculation is growing about a possible leadership change at the Fed, with the market pricing in Kevin Hassett as a potential replacement for Jerome Powell as early as May.
Hassett is seen as more dovish, and if the appointment goes through, pressure on the USD could potentially continue until at least the first half of 2026.
