Dollar index traded near 102.25 in early European trade on Thursday after the
Fed held rates unchanged at its October meeting as expected. Traders await
Friday’s US September PCE inflation report. Carol Kong, FX strategist at
Commonwealth Bank of Australia, said the Fed official’s refusal to signal
further hikes was read as dovish or less hawkish than expected; some had
anticipated guidance on the December meeting but none was provided. Mitsubishi
UFJ analysts noted the official reiterated a commitment to return inflation to
2% and stressed persistent US economic strength, reinforcing that the tightening
cycle may not be over. Markets price roughly an 87% probability of a December
rate increase.
