Dollar gains 0.3% on Fed's cautious rate cut approach

The Dollar Index advanced 0.3% over the past week to 104.15, supported by the Federal Reserve's cautious approach to rate cuts despite reducing rates by 25 basis points to 5.00%. The Fed's dot plot revealed a more gradual easing path than markets anticipated, with only two additional cuts projected for 2025. The Bank of England and Bank of Japan maintained their current policy stances, providing no surprises to currency markets. Against major peers, the dollar gained 0.4% versus the euro (EUR/USD at 1.0615) and 0.2% against sterling (GBP/USD at 1.2480), while remaining flat against the yen (USD/JPY at 149.80). The dollar's resilience reflects market repricing of rate expectations and continued US economic outperformance. Near-term dollar support appears solid, with resistance for the index at 104.50.