The dollar index (DXY00) is trading slightly higher by +0.02% on some safe-haven demand amid today’s sell-off in stocks. The dollar is also seeing support from today’s stronger-than-expected US Q3 GDP report of +3.4%. However, the dollar is being undercut by today’s -5 bp decline in the 10-year T-note yield, which is putting downward pressure on US interest rate differentials.
The markets took Wednesday’s FOMC results largely in stride. The FOMC left its federal funds rate target unchanged at 3.75-4.00%, as the market expected. The markets are now pricing in an 84% chance of a rate hike at the FOMC’s next meeting on December 8-9.