USD Weakens as Fed Cuts Rates 25bp, Markets End Mixed

The US Dollar Index declined 0.4% following the Federal Reserve's third consecutive 25 basis point rate cut, bringing the federal funds rate to 4.25-4.50%. The anticipated move weighed on USD pairs, with EUR/USD gaining 0.3% to 1.0520 and GBP/USD advancing 0.2% to 1.2680. USD/JPY retreated 0.5% to 152.30 as the yen strengthened on risk-off sentiment. Stock markets delivered mixed signals, with the S&P 500 closing flat while the Nasdaq dropped 0.3%, reflecting uncertainty about the pace of future Fed cuts. Fed Chair Powell's comments suggested a more cautious approach to further easing in 2025, citing persistent inflation concerns. Technical analysis shows USD/JPY approaching key support at 152.00, while EUR/USD faces resistance at 1.0550. Traders should monitor upcoming US inflation data and Fed member speeches for directional cues on dollar positioning.