The US dollar fluctuates as the market reassesses the Federal Reserve’s rate path; the European Central Bank decision will be announced today.

1. On Thursday, the US dollar exchange rate tended to stabilize, with the US Dollar Index currently trading near 102.15. The Federal Reserve kept interest rates unchanged as expected and indicated that subsequent inflation data will impact policy direction, leaving investors divided on the future interest rate path. The Federal Reserve decided by a vote of 10 to 2 to postpone rate adjustments until after next week's midterm elections, while upgrading its economic assessment, stating that the current economy is growing at a "robust pace."2. Federal Reserve Chair Walsh stated that he is confident in bringing inflation down to the 2% target without hindering economic growth or raising the unemployment rate. This statement prompted traders to reduce their bets on rate hikes in 2027.3. Commonwealth Bank of Australia FX strategist Carol Kong said that Walsh did not provide clear guidance on December's actions; his silence on further rate hikes was interpreted by the market as dovish or not sufficiently hawkish. The FedWatch tool shows that traders now expect a 78% probability of a rate hike in December. JPMorgan Asset Management strategist Kerry Craig stated that the market reaction is slightly dovish, but since policy tightening has already been reflected in prices, unless there are clearer signals of aggressive tightening or a shift to rate cuts, Treasury yields may remain range-bound.4. The Federal Reserve also announced that starting next year, one of its eight regular policy meetings will be set aside each year, and two will be set aside in 2028, dedicated solely to discussing major issues facing the Fed, without using these meetings to discuss monetary policy adjustments. Analysts at TD Securities see the adjustment of meeting schedules in 2027 and 2028 as a dovish signal, which may also bring about more extreme future measures and more policy actions between regular meetings.5. Market attention is turning to the European Central Bank and the Bank of Japan, which will announce their decisions later on Thursday and Friday, respectively, and are both expected to keep rates unchanged. ING analysts noted that unless there is a major hawkish surprise, the US dollar may consolidate at the upper end of its recent trading range.6. US Q3 GDP data and September PCE data will also be released today, which investors need to focus on.