The dollar index slipped 0.01% to 100.237, just one day after surging 0.7%, its biggest jump in three months, following the US central bank's decision to raise interest rates by 0.25% to a range of 3.75-4.00% at yesterday's meeting, in a unanimous 12-0 vote. It was the first rate increase in more than three years, since July 2023, and since then the Fed had cut rates six times, by a total of 1.75%. Meanwhile, the Dot Plot report showed that 16 of 18 Fed officials expect one more rate hike this year, and project rates ending 2026 and 2027 at the same level, before one cut each in 2028 and 2029. The dollar weakened 0.09% to 1.148 against the euro and fell 0.25% to 155.87 yen, in line with the plunge in oil prices and the decline in US Treasury yields. Bob Edwards, chief investment officer of Edwards Asset Management, said that if the Fed raises rates again, it would likely happen at the December meeting, since the Fed is unlikely to announce a rate change at the October meeting, which falls just days before the November 3 midterm elections, for fear the decision would be seen as politically motivated. As for the Bank of England, the Monetary Policy Committee voted 6-3 to hold the policy rate at 3.75% at today's meeting, in line with analyst expectations, with three members voting for a 0.25% increase. It was the sixth rate hold this year, keeping the rate at 3.75% since December 2025, after four cuts last year. Analysts expect the BoE to raise rates by 0.25% at its next meeting on November 5. The decision to hold rates sets the BoE apart from other major central banks, with the US central bank raising rates by 0.25% yesterday, its first increase since 2023, while the European Central Bank announced its second rate hike this year last week, after its first increase in June, which was its first in three years. The Bank of Japan is expected to raise rates by 0.25% to 1.25%, the highest level in 31 years, at its monetary policy meeting tomorrow.
