USD Forex Forecast: Fed Hikes to 3.75%-4.0%, More Ahead

The Federal Reserve delivered its first interest-rate hike in three years, moving the target range to 3.75%-4.0%. The policy committee's decision to hike was unanimous, a clear hawkish signal for dollar bulls across major forex pairs including EUR/USD and USD/JPY.

Forward guidance, however, was split among committee members, injecting uncertainty into the medium-term USD forecast. Markets are now bracing for additional increases, but the lack of consensus on pace means volatility in dollar pairs is likely to persist as each incoming data print gets scrutinized for clues on the Fed's next move.

This divergence between a hawkish immediate action and a fractured outlook is a classic setup for choppy, headline-driven price action in USD crosses over the coming weeks.