Dollar Extends Post-FOMC Losses

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY) fell to a 1.75-month low, closing down by -0.43% due to negative sentiment following a 25 basis point cut in the federal funds target range by the FOMC and plans to purchase $40 billion in T-bills monthly [1] - US weekly jobless claims increased by +44,000 to a 3-month high of 236,000, indicating labor market weakness, which is dovish for Federal Reserve policy [4] - The US September trade deficit unexpectedly decreased to -$52.8 billion, the smallest in 5.25 years, contrasting with expectations of a widening to -$63.1 billion [4] Group 2: Market Reactions and Future Expectations - The market is currently pricing in a 24% chance of another 25 basis point cut in the federal funds target range at the upcoming FOMC meeting on January 27-28 [4] - Concerns regarding President Trump's potential appointment of a dovish Fed Chair have added bearish pressure on the dollar, with Kevin Hassett being viewed as the most dovish candidate [3] Group 3: Euro and Yen Performance - The EUR/USD pair rose to a 2.25-month high, finishing up by +0.39%, supported by dollar weakness and positive comments from ECB President Lagarde regarding potential economic growth forecast increases [5] - The USD/JPY pair fell by -0.25%, with the yen strengthening due to lower dollar value and improved business confidence in Japan's manufacturing sector [6]