Dollar Falls Below 100.00 After FOMC Meeting

The US Dollar has faced selling pressure following last week's FOMC meeting, where the Fed left interest rates unchanged and provided less hawkish guidance. As a result, the dollar index fell below 100.00 for the first time since hitting a high of 101.64.

According to MUFG, the lack of clear forward guidance from Fed Chair Kevin Warsh is contributing to market volatility. The forecasts assume no Fed rate hikes this year and anticipate a gradual re-weakening of the dollar later in 2026.

However, it's acknowledged that if the Fed decides to hike rates, the dollar could remain stronger for longer.