Forex Today: Fed, war and inflation not enough to take down Wall Street

Valeria Bednarik FXStreet

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:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD softens as Fed rate uncertainty supports US Dollar

GBP/USD edges lower after opening at a bullish gap, remaining within positive territory and trading around 1.3290 during the Asian hours on Tuesday. The currency pair is under pressure as the US Dollar (USD) stabilizes, driven by market caution ahead of the upcoming Federal Reserve policy decision due on Wednesday.

EUR/USD hangs near monthly low, holds above 1.1350 as USD bulls pause ahead of FOMC meeting

The EUR/USD pair is seen consolidating near the monthly trough and trading just above mid-1.1300s during the Asian session on Tuesday. Traders seem hesitant and await the outcome of a two-day FOMC policy meeting before placing aggressive directional bets.

Gold looks vulnerable as focus shifts to the Fed meeting

Gold is challenging the $4,050 level early Tuesday, extending the pullback from above $4,100, as sellers remain in control ahead of the two-day US Federal Reserve monetary policy meeting, starting later in the day. Gold is in the red for the second consecutive day so far this Tuesday, undermined by the recent demand for the US Dollar.

Senate prepares for potential CLARITY Act floor vote as Republicans work to secure support

Senate Republicans are preparing to advance the CLARITY Act as lawmakers face a narrow window to begin floor proceedings before the August recess. Senate Majority Leader John Thune is expected to move toward filing cloture on the motion to proceed to the bill, according to a Monday report by Eleanor Terrett.

Asian stocks including KOSPI slide as AI doubts hit chipmakers

Asian stocks fall sharply on Tuesday as mounting skepticism over the massive financial returns on artificial intelligence spending triggered a widespread sell-off across global semiconductor shares. The tech-driven downturn rippled from Wall Street into Asian markets, while investors shifted toward safety, driving bond prices higher and sending oil lower.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.