The Federal Reserve kept interest rates unchanged in its latest policy meeting, a decision that triggered an immediate retreat in the US dollar and provided relief to emerging-market currencies.
While the central bank maintained its current stance, the move was not unanimous; three voting members openly supported a rate increase, highlighting significant internal division over the appropriate monetary path.
The dollar’s decline followed the announcement, reversing some of the recent strength it had gained from geopolitical tensions in the Middle East and prior expectations of a hawkish Fed posture.
The weaker greenback directly benefited the Polish zloty, which had been under pressure from the dollar’s broader rally.
Traders interpreted the split vote as a signal that the Fed is proceeding with caution, balancing inflation concerns against the risks of overtightening.
This development marks a shift from the recent narrative where the dollar found renewed support from the Fed’s hawkish tone.