The dollar index (DXY00) on Wednesday fell to a 6-week low and finished down by -0.63%. The dollar retreated on Wednesday after the FOMC cut the federal funds target range by -25 bp. The dollar was also pressured on Wednesday after the US Q3 employment cost index rose less than expected, a dovish factor for Fed policy. The dollar sank to its low after the Fed said it will boost liquidity in the financial system and begin purchasing $40 billion a month in T-bills.
Positives for the dollar included the FOMC raising its US 2025 GDP forecast and lowering its core PCE price forecast. Also, comments from Fed Chair Powell were supportive of the dollar when he signaled that the Fed may pause its interest rate-cutting campaign.
