As risk appetite grows and interest rates reach 3.30 percent, the US Dollar Index is likely to fall below 104.70

The US dollar index (DXY) has had a significant dip from opening flat and is expected to extend its losses after going below Wednesday's low of 104.66. As a result of the Federal Reserve's (Fed) announcement of a 75 basis point rate hike, the DXY became very volatile (bps). Although the long-term assumption was 50 basis points, last week's announcement of a stronger US inflation data of 8.6% boosted the chances of a big rate hike. Sharply declining US Treasury rates imposed intense selling pressure on the asset. On Wednesday, yields on 10-year US Treasuries plummeted 5.50 percent. The benchmark yield at the time of writing is 3.29 percent. After nearly 28 years, the Fed has issued a 75-basis-point rate increase.

Powell's press conference following the announcement of monetary policy It was noticed that Fed chair Jerome Powell was thankful of the solid and well-positioned economic development, which has enabled the Fed to mandate a huge rate increase. In addition, persistent employment growth in the US economy has prompted the Fed to take a firm position on interest rates. The excessive policy tightening of an economy affects growth predictions. The Federal Reserve considers it a success if inflation rates fall to roughly 2 percent and the unemployment rate remains at 4.1%.

Wednesday's publication of US Retail Sales data was eclipsed by the Fed's interest rate announcement. The monthly Retail Sales were negative, coming in at -0.3 percent, which was much lower than both estimates and the prior reading of 0.2% and 0.7%, respectively. In contrast, the Retail Sales Control group was recorded at 0%, which was below both expectations and the prior reading of 0.5%.