• The index drops to 10-month lows near 100.80.
• The dollar remains on the defensive post-FOMC event.
• Initial Claims, Factory Orders next of note in the docket.

The greenback, in terms of the USD Index (DXY), adds to the weekly leg lower and breaks below the 101.00 support to print new 10-month lows on Thursday.

USD Index: A visit to 100.00 appears on the horizon

The index retreats for the third session in a row and maintains the 2-week negative streak well in place on the back of further deterioration of the price action around the dollar, especially following the FOMC event on February 1.

Indeed, the dollar keeps losing ground as market participants continue to assess the recent decision by the Fed to raise rates by 25 bps, the smallest hike since the beginning of the tightening cycle almost a year ago.

Both the Fed’s statement and Powell’s press conference acknowledged that inflation seems to have lost some traction albeit it remains elevated, suggesting that the ongoing increasing rates remain appropriate and opening the door to a new “normal” at 25 bps.

Later in the NA session, usual weekly Claims are due seconded by Factory Orders. Of note, in addition, will be the interest rate decisions by the ECB and the BoE, where a 50 bps rate hike appears already priced in in both events.