The US dollar sells off, then reverses after the Fed’s rate cut. US stocks maintain bullish control. Asia Pacific markets are mixed, with gold’s rally pausing.
US dollar rebounds after FOMC but stalls below resistance; US stocks stay firm
After the FOMC monetary policy decision and Fed Chair Powell’s press conference, a roller coaster ride was seen in the FX market yesterday. The US dollar sold off after the release of the FOMC monetary policy statement and the latest summary of economic projections (dot plot), where the Fed cut by 25 basis points (bps) as expected to bring down the Fed funds rate to 4.00%-4.25% and projects two more interest rate cuts of 25 bps each before 2025 ends, that’s in line with market expectations.
The US Dollar Index initially fell by 0.4% but later reversed all losses to close Wednesday, 17 September’s US session with a gain of 0.4%. The rebound came after Fed Chair Powell described the latest policy move as a “risk management” cut, emphasising that the Fed will remain data-dependent and proceed “meeting by meeting.” This stance reduced expectations of a deeper, new cycle of monetary policy easing.
In today’s Asia session, the US dollar has continued to extend its gains, rallying the most against the NZD (-1%) and AUD (-0.5%). The latest weaker-than-expected employment change data for Australia (August: -5,400, July: 26,500, Consensus: 22,000) reinforced the intraday weakness in the Australian dollar.
The US Dollar Index staged an intraday gain of 0.2% to trade at 97.20 at the time of writing as it remained below a key resistance of 97.30, a former major support that was broken down on Tuesday, 16 September 2025, before the FOMC meeting.
The bulls have remained in control in the US stock market, and rotation towards the prior laggards has materialised as the Dow Jones Industrial Average and small-cap Russell 2000 outperformed yesterday with gains of 0.6% and 0.2% respectively.
Also, yesterday’s modest losses in the mega-cap S&P 500 (-0.1%) and Nasdaq 100 (-0.2%) were erased in today’s Asian session as the S&P 500 and Nasdaq 100 E-mini futures rallied by 0.4% and 0.6% respectively.
Mixed performances were seen within the Asia Pacific stock markets. Japan’s Nikkei 225 extended its rally with an intraday gain of 1.2% to hit another fresh all-time high of 45,303. The Hong Kong stock market saw profit-taking activities after the Hang Seng Index hit a four-year high, where it shed -1.5% at the time of writing.
Gold (XAU/USD)’s prior three-week rally paused as it declined by -0.8% yesterday and extended its losses further by -0.5% in today’s Asian session, triggered by the intraday rebound seen in the US dollar.
Our YouTube video above contains the latest intraday technical analysis on the US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
