USD Weakens Post-Fed Cut: DXY Drops as Treasury Yields Fall
The US Dollar Index (DXY) declined 0.5% to 106.20 following the Federal Reserve's 25 basis point rate cut, bringing the federal funds rate to 4.25-4.50%. Treasury yields tumbled across the curve, with the 10-year yield dropping 8 basis points to 4.52%, pressuring the greenback lower. GBP/USD surged 0.8% to 1.2780, while USD/CHF fell 0.6% to 0.8920 as safe-haven flows intensified. The Fed's dot plot showed fewer rate cuts expected in 2025 than previously anticipated, but markets focused on the immediate easing. Technical indicators suggest DXY support at 106.00, with resistance now at 107.00. The dollar's weakness could extend if upcoming US inflation data shows further cooling, potentially opening the door for additional Fed easing in early 2025.
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