Dollar Slips Into Fed Week as Risk-On Mood Builds

Updated: Oct 28, 2025 (U.S. session) · Reading time: 10-12 minutes
Information only – not financial advice.

TL DR

U.S. dollar edged lower as traders priced a likely Fed rate cut and watched diplomatic headlines around a potential Trump–Xi meeting during the Asia tour. Risk appetite improved. Reuters
FOMC begins today (Oct 28–29); statement due Wednesday 2:00 p.m. ET with a press conference at 2:30 p.m. ET. Markets lean toward a 25 bps cut. Kiplinger+2Federal Reserve+2
U.S. data: CB Consumer Confidence printed 93.4 vs 94.2 f/c this morning – a soft read that didn’t derail the risk mood. Investing.com
FX highlights: EUR/USD and GBP/USD ticked higher; AUD/NZD firmed with risk-on tone; JPY was supported ahead of BoJ as USD/JPY hovers below noted resistance. Reuters+1

What changed today in the U.S. Forex session

The U.S. dollar softened against majors as traders looked past recent defensive positioning and leaned into a risk-on backdrop driven by two narratives:

Anticipation of a Federal Reserve rate cut this week, and
Diplomatic optics around President Trump’s Asia trip and a possible Trump-Xi interaction that could ease trade tensions. Reuters

By mid-day, the greenback’s pullback was modest but broad, with euro and sterling off their lows and AUD/NZD benefitting from improved sentiment. Markets were also parsing a weaker-than-expected U.S. CB Consumer Confidence (93.4 vs 94.2 forecast) – not a game-changer, but consistent with the Fed’s easier tilt priced by futures. Investing.com+1

Dollar Slips Into Fed Week as Risk-On Mood Builds

“Kab aur kahan?”- U.S. session timeline (moves & catalysts)

Times are Eastern Time (ET). Levels are indicative from major-media intraday reporting; FX is continuous and can change quickly.

Time (ET)	What moved	Pairs most affected	Approx. levels seen / direction	Likely catalyst	Source
9:00 a.m.	Early risk tone firm	EUR/USD, AUD/USD	USD a touch softer	O/N optimism around Trump-Xi meeting prospects	Reuters
10:00 a.m.	CB Consumer Confidence	DXY, USD/JPY, EUR/USD	Soft data (93.4 vs 94.2 f/c) nudges USD lower	U.S. data miss adds to cut odds narrative	Investing.com
Midday	Risk appetite holds	EUR/USD, GBP/USD	Euro/sterling grind higher	Markets position into FOMC Day 1	Reuters
Afternoon	Yen watch	USD/JPY	USD/JPY steady-softer below noted resistance	BoJ proximity; intervention chatter top-of-mind	Forex

Reading the tape: Aaj ka flow macro-led tha – Fed expectations + diplomacy/trade tone ne USD ko soft rakha; dips ke bawajood, positioning is cautious into tomorrow’s 2:00 p.m. ET FOMC statement. Kiplinger+1

Pair-by-pair: what’s driving majors today

EUR/USD: quietly firmer as dollar softens

The euro ticked higher alongside broader risk appetite, with traders citing a softer dollar into the Fed and constructive trade headlines. Earlier reports had euro at a one-week high; today’s tone stayed supportive with the USD on the back foot. Into the Fed, many desks prefer tactical longs on dips, mindful of headline risk at the statement. Reuters

GBP/USD: follows the euro; eye on U.S. data and gilts correlation

Sterling rode the same risk tide. With no blockbuster U.K. releases today, GBP/USD mostly echoed USD-led moves. A dovish-leaning Fed tomorrow typically helps GBP via broad USD softness, but sensitivity to risk-off reversals remains. Reuters

USD/JPY: gravity from BoJ proximity and resistance caps

USD/JPY lagged broader USD weakness earlier in October but today yen support re-emerged as traders eyed the BoJ and noted resistance below the 153 handle flagged by multiple technical updates. Any dovish surprise from the Fed (or strong “intervention watch” headlines) can deepen pullbacks; conversely, a hawkish sting could re-lift the pair. Forex

AUD/USD & NZD/USD: beta to risk

Both antipodeans firmed as risk appetite improved, consistent with their high-beta profile to global growth and China-linked headlines. If trade rhetoric between the U.S. and China stays constructive, AUD and NZD typically outperform on such days. Reuters

Table – “Top movers” snapshot

Indicative snapshot based on major outlets’ intraday reporting (not live quotes).

Pair	Direction vs USD today	“Why” in one line	Notes
EUR/USD	Up	USD softer into FOMC + better risk mood	Euro earlier reported near short-term highs. Reuters
GBP/USD	Up	Follows USD-led move; risk-on helps	Watch U.S. event risk tomorrow. Reuters
USD/JPY	Down (USD weaker / JPY firmer)	BoJ proximity; resistance noted below ~153	Intervention watch keeps traders cautious. Forex
AUD/USD	Up	Risk-on + China headlines	High-beta response typical. Reuters
NZD/USD	Up	Tracks AUD; sentiment-led	Sensitive to risk swings. Reuters

The Fed in focus: schedule and what markets expect

The FOMC meeting runs Oct 28–29, with the policy statement at 2:00 p.m. ET Wednesday and a press conference at 2:30 p.m. ET. Multiple calendars and previews point to a 25 bps cut as the base case, given shakier confidence, a softer labor backdrop, and the data fog from the ongoing government shutdown. Traders will parse any guidance on QT and how the Fed weighs inflation vs employment trade-offs. Kiplinger+2Federal Reserve+2

What matters for USD:

Dovish cut (softer statement) → USD down / risk up (EUR, GBP, AUD, NZD supported; USD/JPY heavy).
Hawkish cut (tough talk on inflation) → USD bounce (EUR, GBP ease; USD/JPY could re-test highs).
No cut (big surprise) → USD up sharply; risk assets wobble.

U.S. data check: Consumer Confidence

The Conference Board Consumer Confidence index came in at 93.4 for October (forecast 94.2; prior 94.2), a small miss that broadly aligns with a slower, more cautious U.S. consumer. The release added gentle pressure on the dollar without changing the core FOMC narrative. Investing.com

Strategy notes for U.S. readers

1) Respect the clock

FOMC days can whipsaw FX in minutes. If you’re trading intraday, define risk before the statement and consider scaling rather than “all-in” orders.

2) Think in scenarios

Have two plans: a dovish-cut path (USD fades) and a hawkish-cut path (USD pops). Update plans again after the press conference Q&A.

3) Pair selection matters

If you’re playing broad USD softness, EUR/USD and GBP/USD tend to respond cleanly to the policy tone.
If you want volatility, USD/JPY around BoJ windows and intervention chatter can move fast. Forex
If risk stays buoyant, AUD/NZD often outperform on beta.

4) Beware of “data drought” distortions

With portions of U.S. data delayed by the shutdown, the Fed and the market may be flying with less visibility, which can make guidance and forward-looking language more powerful than usual. Investopedia

Q1) Why did the U.S. dollar slip today?

Traders leaned into risk-on positioning as they anticipated a Fed cut and monitored headlines around a Trump–Xi meeting; softer Consumer Confidence (93.4) added to the tone. Reuters+1

Q2) When is the Fed decision and press conference?

Statement Wednesday 2:00 p.m. ET, press conference 2:30 p.m. ET. The meeting runs Oct 28–29. Federal Reserve+1

Q3) Which pairs matter most around the Fed?

EUR/USD and GBP/USD often reflect broad USD tone; USD/JPY is sensitive to BoJ timing and intervention talk; AUD/NZD reflect risk appetite.

Conclusion

Today’s U.S. forex tape was the classic “calm before the Fed”: a softer dollar, better risk tone, and a watchful eye on diplomatic optics. With the FOMC set to deliver its decision on Wednesday at 2:00 p.m. ET, the question isn’t just if the Fed cuts, but how it frames the path ahead on jobs, inflation, and balance-sheet policy. For traders, it’s a two-step dance: the statement, then the press conference. Expect volatility, respect levels, and let the policy language guide your bias rather than anchoring to one headline. Kiplinger+1