Dollar Weakness Persists as Fed Decision Reduces Rate Hike Expectations

The US dollar's appeal is waning as interest rate expectations decrease after the Federal Reserve's decision to keep rates unchanged.

Fed Chair Kevin Warsh emphasized the importance of reaching the 2% inflation target and reduced forward guidance, signaling a less aggressive monetary policy stance in the short term.

The CME Group probability table shows a lower likelihood of a 0.25% rate hike at the September 16 decision, with expectations shifting towards keeping rates unchanged.

This has led to a decline in demand for dollar-denominated investments, causing the US dollar index (DXY) to fall and approach the psychological 100-point level again.