Dollar extends post-Fed rebound; sterling hit by fiscal worries

Group 1 - The U.S. dollar strengthened by 0.3% to 97.662, rebounding against most major currencies after the Federal Reserve cut interest rates but indicated a gradual easing in the future [1][2] - The Fed's "dot plot" forecast suggests two more rate reductions this year, but the actual votes were not as dovish as the statement indicated, reflecting concerns about the labor market [2] - Analysts suggest that the current dollar strength may be a counter-trend move, with expectations of better selling levels in the near future [3] Group 2 - The British pound fell 0.6% to $1.3468, marking its largest two-day drop since early April, driven by concerns over the fiscal outlook following a surge in borrowing [4][5] - Despite a 0.5% increase in UK retail sales in August, the poor borrowing data highlighted challenges for the UK Chancellor in delivering the budget [5][6] - The borrowing figures are the highest for the first five months of a financial year since 2020, potentially leading to further tax increases to meet fiscal rules [6][7]