Fed's Unclear Reaction Function Clouds Dollar Outlook, Says MUFG
The Federal Reserve's rate hold and Chair Warsh's failure to justify the pause have triggered a long-end Treasury sell-off and modest dollar weakness, clouding the US currency's outlook, according to MUFG.
DXY
Derek Halpenny at MUFG noted that the Federal Reserve's decision to keep rates unchanged, coupled with Chair Warsh's inability to clearly articulate the reasons for the pause, triggered a sell-off in longer-dated U.S. Treasuries and exerted modest pressure on the dollar.
The uncertainty surrounding the Fed's reaction function is now clouding the near-term outlook for the greenback, as markets reassess the central bank's policy path.
Source: FXStreet Forex News