The dollar index weakened again below 101 on Thursday, reversing gains from earlier in the session as investors continued to assess the implications of the latest Federal Reserve policy decision.

The Fed delivered an aggressive 50 basis point rate cut on Wednesday for its first rate reduction since the early days of the Covid pandemic. The central bank indicated confidence that inflation is moving sustainably toward 2% and moved to prevent a slowdown in the labor market. Meanwhile, Powell said the central bank is not in a rush to ease policy and that half-percentage point cuts are not the "new pace."

His comments prompted traders to buy the dip on the dollar, but the greenback slowly erased those gains amid concerns that other major central banks could ease policy less aggressively than the Fed.

Source: Trading Economics