BBH analyst: The US dollar index DXY has recovered more than one-third of its losses after the FOMC meeting

According to Jinshi Data, BBH analysts said in a report that the US dollar index DXY has recovered more than a third of its losses after the FOMC meeting as the Bank of Japan turned dovish and "is carrying out damage control."

The USD/JPY pair rose to 147 from Monday’s low of 142, with the U.S. dollar index DXY rising 0.3% on the day.

Earlier this week, the yen strengthened against the dollar as the Federal Reserve appeared to be under pressure to quickly cut interest rates, while the Bank of Japan moved in the opposite direction. But now both central banks appear to be in less of a hurry.

The market expects the Federal Reserve to cut interest rates by 50 basis points in September, but BBH disagrees. BBH said the U.S. economy "is still growing at an above-trend rate" and the market is getting carried away.