Expectations for a Federal Reserve rate hike remain uncertain as softer US inflation and labor data have tempered market sentiment. According to FX Street (DBS Group Research), the US Dollar Index (DXY) traded within a narrow 99.4–100.1 range on Thursday, following USD/JPY sell-offs linked to coordinated US-Japan market interventions.
Fed President Thomas Barkin of the Richmond Federal Reserve highlighted persistent uncertainty regarding the inflation outlook and monetary policy direction, as reported by FX Street (Richmond Fed). Meanwhile, Rabobank noted that EUR/USD movements reflect shifting Fed rate hike expectations alongside oil-driven safe haven flows into the US Dollar.
Adding to the broader context, FX Street (Commerzbank) pointed out that former President Donald Trump’s past and potential future criticisms may continue to impact perceptions of Federal Reserve independence. For Japanese markets, ongoing US-Japan interventions and the evolving Fed outlook remain key factors influencing USD/JPY and broader FX dynamics.