USD Rebounds Across Majors as Fed Maintains Hawkish Hold

The US Dollar has found support across major pairs following the Federal Reserve's decision to keep rates unchanged at 5.25-5.50%. EUR/USD retreated 0.4% to 1.0780, while GBP/USD dropped 0.5% to 1.3350 despite UK inflation holding steady. AUD/USD fell sharply by 0.7% to 0.6620 as rate cut expectations for the RBA increased to 70 basis points by year-end. USD/CAD advanced 0.3% to 1.3680, supported by diverging monetary policy outlooks between the Fed and BoC. The Dollar Index climbed back above 104.50, recovering from recent lows. Technical indicators suggest the dollar's rebound has room to extend, with the RSI on DXY rising from oversold levels. Traders are positioning for continued dollar strength unless upcoming US economic data significantly disappoints, particularly next week's PCE inflation figures.