[MARKET ANALYSIS] DXY remains softer after the FOMC lacked any hawkish surprises

DXY: -0.1%

• Remains softer in the aftermath of the FOMC meeting, where the Fed kept rates on hold, as widely expected, but with two hawkish dissenters as Hammack (exp.) and Cook (unexp.) voted for rate increases, while the Committee noted that "The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 per cent goal". There was initial choppy price action seen following the decision and statement, although USD pressure set in shortly after as Fed Chair Warsh's press conference lacked the hawkish elements needed to support the buck and resulted in a decline in short-end yields.

EUR/USD: Flat

• Holds on to the prior day's gains after benefitting from the softer buck and as participants await the ECB meeting, where policymakers are expected to keep rates unchanged despite elevated energy prices and inflation concerns.

GBP/USD: +0.1%

• Marginally gained following the FOMC and UK Budget announcement, with Chancellor Healey confirming a 3ppt increase in the bank tax surcharge at the Autumn Budget announcement, while the OBR raised its 2027 inflation forecast to 3.4% from 2.0% and lowered GDP growth expectations to 1.0%.

USD/JPY: -0.1%

• Trickled lower with headwinds seen post-FOMC and amid few fresh catalysts for Japan, while the BoJ begins its 2-day policy meeting, where the central bank is expected to keep rates unchanged, although participants will be eyeing the language regarding achieving the 2% price target.

Antipodeans: AUD/USD Flat / NZD/USD -0.1%

• Price action is range-bound amid the mixed risk appetite and absence of tier-1 data releases.

Meetings that deliver the expected hold but leak dissent against the chair's stance tend to trade on the press conference rather than the statement, and that is the established pattern here: the two votes for hikes did the dollar no good once the chair declined to validate them, short-end yields gave back ground, and the dollar softened through the follow-through rather than the initial whipsaw. Hawkish dissents of this kind have historically mattered less for immediate pricing than for what they signal about committee cohesion, since dissents against a hold from both an expected and an unexpected name mark out the internal pressure points that later meetings reprice around. The forward tells are whether the dissenting faction grows or is absorbed at the next meeting, and whether the chair's non-committal framing survives the next round of inflation data, since that framing is what is currently capping front-end yields. Elsewhere the board is a holding pattern: the euro is parked ahead of an ECB expected to sit tight despite energy-driven inflation discomfort, yen trade is subdued into the BoJ with the signal resting on language around the price target rather than the rate call, and sterling's gain owed as much to the domestic budget as to the dollar, with the bank surcharge increase and the upward revision to the inflation forecast a mix that has historically leaned on gilts and the front of the UK curve rather than on the currency directly. Antipodean ranges in the absence of tier-1 data are typical of post-FOMC sessions. The next concrete events are the ECB and BoJ outcomes and any follow-up commentary from the dissenters.