Fed Rate Hike Sends US Dollar Index Soaring Past Psychological Barrier

The US Dollar Index (DXY) has made significant gains after the Federal Reserve (Fed) raised its Fed Funds Target Rate (FFTR) by a quarter percentage point to 3.75%-4.00%, as widely anticipated.

This decision has allowed the DXY to reclaim the psychological 100.00 barrier and beyond, causing other currencies to adjust their value in response.

The EUR/USD pair has dropped below the 1.1500 contention zone, hitting fresh multi-week troughs due to the solid performance of the US Dollar post-Fed decision.

In contrast, the BoE is expected to keep its bank rate unchanged at its upcoming meeting on Thursday, which may impact the value of GBP/USD.