Forex Today: Fed, war and inflation not enough to take down Wall Street
|What you need to take care of on Thursday, March 17:
The American dollar ended the day lower after the US Federal Reserve monetary policy decision. The US central bank hiked rates by 25 bps, as expected, with Bullard being the only dissenter voting for a 50 bps hike. However, the dot-plot now indicates six rate hikes for the year, while Fed officials see the Fed Funds rate at a median of 1.9% at the end of this year and 2.8% at the end of 2024.
Stocks initially fell with the announcement but quickly recovered as chief Jerome Powell sounded optimistic about the economic progress and convinced market participants that the central bank is in control of the situation.
Meanwhile, there has been no real progress in Ukrainian and Russian peace talks. Moscow said they made “significant progress” towards a 15-point peace plan that would include a ceasefire and Russian withdrawal from Ukraine if Kyiv declares neutrality and accepts limits on its military forces. However, Kyiv rejected the proposed neutrality. Also, the International Court of Justice in The Hague ordered Russia to suspend the invasion of Ukraine.
Financial markets remained optimistic, with most global indexes closing in the green. All of the US indexes closed with gains, with the Nasdaq Composite being the best performer by adding over 3%.
US government bond yields continued to pressure the upside. The yield on the 10-year Treasury note peaked at 2.246% to later settle at 2.16%.
The EUR/USD pair reached fresh weekly highs in the 1.1040 price zone, while GBP/USD extended its recovery to 1.3155. Meanwhile, the AUD/USD pair flirts with 0.7300 while USD/CAD plunged to 1.2690.
The USD/JPY pair hit a fresh multi-year high of 119.11 before retreating towards the current 118.60 price zone.
Gold posted a nice comeback after dipping to $1,895 a troy ounce, now trading at around $1,929.40. Crude oil prices, on the other hand, remained under pressure, and WTI settled just below $95 a barrel.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.