Dollar Weakens as Markets Assess Fed Policy Outlook
The US dollar index slipped to around 102 on Thursday, retreating from 18-month highs as investors continued to evaluate the Federal Reserve’s monetary policy outlook following stronger-than-expected inflation data. Figures released Wednesday showed that annual headline inflation accelerated to 3.7% in September, surpassing forecasts of 3.6%, while core inflation edged up to 2.6%, above expectations of 2.5%. Federal Reserve Bank of Chicago President Austan Goolsbee described the figures as “discouraging” and cautioned that the rapid expansion of artificial intelligence infrastructure could also be overheating the economy. However, some policymakers continued to favor a cautious approach to further rate increases, with markets pricing in roughly a 73% probability that the Fed will keep interest rates unchanged this month. Investors are now awaiting further remarks from Fed Chair Kevin Warsh ahead of the central bank’s media blackout, which begins on Saturday.
The US dollar index slipped to around 102 on Thursday, retreating from 18-month highs as investors continued to evaluate the Federal Reserve’s monetary policy outlook following stronger-than-expected inflation data. 5%. Federal Reserve Bank of Chicago President Austan Goolsbee described the figures as “discouraging” and cautioned that the rapid expansion of artificial intelligence infrastructure could also be overheating the economy. However, some policymakers continued to favor a cautious approach to further rate increases, with markets pricing in roughly a 73% probability that the Fed will keep interest rates unchanged this month.
Investors are now awaiting further remarks from Fed Chair Kevin Warsh ahead of the central bank’s media blackout, which begins on Saturday.