Dollar Eases Ahead of BoJ Decision Amid Hawkish Fed Message
The US Dollar (USD) has softened on Thursday ahead of the Bank of Japan's decision. The US Dollar Index (DXY) hovered just above the 100.00 mark after reaching a seven-week high earlier in the week.
This sideways action follows the Federal Reserve's (Fed) decision to raise interest rates for the first time since 2023, which briefly lifted the Dollar but faded as energy prices came off their highs and President Donald Trump renewed his demand for sharply lower rates.
The Fed's message was clearly hawkish, with Chair Kevin Warsh flagging that another hike could still come this year, keeping a floor under the Greenback. A sharp rally in Gold and a steadier tone in equities point to firmer risk appetite as traders turn to a busy Friday dominated by the Bank of Japan (BoJ).
The heat map shows modest gains for EUR/USD in the high-1.1400s, holding firm with the softer Dollar lending support. AUD/USD has extended its rebound into the low-0.7100s as risk appetite improves.