USD weakens as Fed pauses amid geopolitical tensions and mixed earnings

The US dollar index declined 0.2% to 103.45 as markets digested the Federal Reserve's widely anticipated pause in rate hikes, while renewed geopolitical tensions added to market uncertainty. Mixed corporate earnings reports have created divergent sector performances, with technology stocks outperforming while financial shares lagged. The Fed's decision to maintain rates at 5.25-5.50% was expected, but dovish commentary suggesting potential rate cuts later in 2024 pressured the greenback. Safe-haven flows remained muted despite geopolitical concerns, with traders focusing more on monetary policy implications. Technical indicators show the DXY facing resistance at 104.00, with support established at 103.20. The combination of Fed dovishness and earnings volatility suggests continued dollar weakness in the near term, particularly against commodity currencies benefiting from risk-on sentiment.