US DOLLAR BOUNCES BACK AFTER FOMC DECISION

• The US Dollar strengthens post-FOMC decision with market participants setting their sights on Friday's Nonfarm Payrolls data.
• In spite of signs of disinflation, the US economic landscape remains strong, prompting the Fed to maintain a data-dependent stance.
• Chair Powell commented that the bank will cut in case data continues showing progress.

On Thursday, the US Dollar, as assessed by the DXY index, saw a rebound following the Federal Reserve’s (Fed) session on Wednesday. Despite the increased chances for a cut in September, the solid status of the US economy led to demands for more data by Chair Jerome Powell before proceeding with the cut, which slightly reduced the odds of a cut in September though they still remain high.

The initial signs of disinflation are beginning to surface in the US economic outlook, further strengthening the market's expectations for a September rate cut. Nevertheless, the broader economy is still exhibiting robustness as supported mainly by economic activity indicators.