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The U.S. dollar (USD) strengthened late in U.S. trading on Wednesday as investors reacted to the Federal Reserve’s (Fed) hawkish pause in interest rate hikes, with the U.S. dollar index hitting a new multi-month high above 105.50 in early trading on Thursday. The Swiss National Bank (SNB) and the Bank of England (BOE) will announce policy decisions during the European session. Later, the U.S. economic calendar will include weekly jobless claims and August existing home sales data.
The Federal Reserve kept its policy rate unchanged at 5.25%-5.5% as expected after its September policy meeting. However, the revised Summary of Economic Projections (SEP) – known as the dot plot – confirmed that the U.S. central bank is on track to raise policy rates by another 25 basis points before the end of the year. Additionally, policymakers now see a total of 50 basis points of rate cuts next year, compared with a June dot plot predicting a 100 basis point cut. FOMC Chairman Jerome Powell said at a press conference after the meeting: “Most policymakers believe that another increase in interest rates is more likely than not to increase interest rates.
