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Forex Today: The Fed, the whole Fed and nothing but the Fed

by FX BrokerNews

The US Dollar successfully upheld its positive momentum across multiple sessions, driving the USD Index (DXY) back above 104.00, albeit briefly. The Dollar’s rally was supported by the significant depreciation of the Japanese yen following the expected rate hike by the Bank of Japan (BoJ). Attention now turns to the Federal Reserve’s meeting on March 20, where market focus will be squarely on the central bank’s decisions and statements.

Here is what you need to know on Wednesday, March 20:

The USD Index (DXY) surged to its highest level in three weeks, surpassing the 104.00 mark, despite a pullback in US yields. All eyes are now on the Federal Reserve’s interest rate decision, FOMC Economic Projections, and Chair Powell’s press conference scheduled for March 20.

EUR/USD continued its downward trajectory, reaching multi-week lows near the 1.0830 level and testing the critical 200-day SMA. On the same day, ECB President C. Lagarde is set to speak, while the European Commission will release its flash Consumer Confidence index.

GBP/USD reversed its earlier decline around the 1.2670 zone and reclaimed ground above the 1.2700 level by the end of the North American session. The UK’s Inflation Rate data is scheduled for release on March 20.

USD/JPY saw significant gains, trading just shy of the key 151.00 level, or its highest level in 2024, as selling pressure on the yen intensified following the BoJ’s rate hike.

AUD/USD extended its downtrend for the fourth consecutive session, nearing key support around the 0.6500 level, driven by a stronger US Dollar and the RBA’s dovish stance. The RBA’s Consumer Inflation Expectations data is expected on March 20.

WTI crude oil prices surpassed the $83.00 per barrel mark, reaching four-month highs due to geopolitical tensions and expectations of increased demand.

Gold prices retreated from Monday’s slight gains, trading with modest losses around the $2,150 per troy ounce level, as the US Dollar strengthened further and US yields declined. Similarly, silver prices declined for the second consecutive session following Friday’s highs near the $25.50 per ounce mark.

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