Dollar Index stays muted below 101 mark; All eyes on Fed decision

The US dollar is staying muted below 101 mark on Wednesday with all eyes glued to Federal Reserves interest rate decision due later in the global day. The Fed is anticipated to lower the Fed funds rate, which currently stands at a 23-year high of 5.25%-5.50%. This would be the first rate cut since March 2020. Headline annual inflation rate in the US also slowed for a fifth consecutive month to 2.5% in August, the lowest since February 2021 while the annual core rate stood at an over three-year low of 3.2%. Currently, the dollar index that measures the greenback against a basket of currencies is quoting at 100.55, down marginally on the day. Yesterday, DXY gained upward momentum following the release of strong US Retail Sales data. Retail sales increased by 0.1% month-over-month in August, following a revised 1.1% growth in July. This data points to resilient consumer spending.

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