Global markets rally on Fed cuts, JPY and CHF weaken vs USD peers

Global financial markets reacted positively to the Federal Reserve's interest rate reduction, with equity indices reaching new highs and significant shifts in forex positioning. The Fed's 25bp cut and forward guidance suggesting further easing in 2025 triggered broad-based USD selling initially, though safe-haven currencies JPY and CHF underperformed as risk appetite improved. USD/JPY held steady near 149.50 despite dollar weakness, as carry trade dynamics favored higher-yielding currencies. EUR/USD extended gains to 1.0980, while GBP/USD tested 1.3150 resistance. The rate differential narrowing between the Fed and other major central banks has altered the forex landscape, with traders repositioning for a potential trend reversal in dollar strength. Key support for the dollar index sits at 103.00, with a break below potentially accelerating the downtrend. Market focus shifts to upcoming central bank meetings from the ECB and BoE for further policy divergence clues.