The US Dollar Index stabilized on Friday at approximately 104.50 levels, as investors evaluated the Fed's decision on interest rates released yesterday.
The Fed cut the interest rate yesterday by 25 basis points as expected, and the head of the bank Powell emphasized that the central bank is not on a predetermined path.
He stated that decisions will continue to be made on a meeting-by-meeting basis, and that the upcoming elections will not affect policy decisions in the short term.
Market expectations point to another quarter-point cut in December of over 70% now, although any upside surprises in inflation or labor market data may change these expectations.
At the same time, investors lowered their bets on a 2025 interest rate cut amid concerns about Trump's return to the White House.
Markets are worried that the proposed tariff increases could fuel inflation, which could prevent the Fed from cutting interest rates further than expected.
In the end, we expect the US dollar to return to the rise after it made some downward corrections on Thursday.
