Forex Today: Markets brace for volatility surge on Fed rate decision and Powell presser


Share:

Here is what you need to know on Wednesday, March 22:

Financial markets stay quiet mid-week as investors step aside while preparing for the US Federal Reserve's (Fed) policy announcements and Chairman Jerome Powell's press conference. Ahead of this event, several European Central Bank (ECB) policymakers, including President Christine Lagarde, are scheduled to deliver speeches. Weekly Mortgage Applications and EIA Crude Oil Stock Change will be the only data featured in the US economic docket.

Fed March Meeting Preview: Too many moving parts.

The Fed is widely expected to raise its policy rate by 25 basis points to the range of 4.75%-5% following its March policy meeting. The revised Summary of Projections (SEP) will also be published alongside the policy statement at 1800 GMT. Half an hour later, Powell will deliver his prepared remarks and respond to questions from the press. The terminal rate projection in the SEP and Powell's approach to the market turmoil that was triggered by the collapse of Silicon Valley Bank will likely impact the risk perception in a significant way in the second half of the day.

Federal Reserve Preview: Powell to persevere and raise rates, US Dollar set to (temporarily) rise.

In the early European session, the US Dollar Index continues to fluctuate in a tight range above 103.00 and the 10-year US T-bond yield consolidates its gains above 3.5% following Tuesday 3.5% increase. Reflecting the cautious market stance, US stock index futures trade virtually unchanged.

Fed Preview: A dovish last hike?

EUR/USD preserved its bullish momentum and closed the fourth straight trading day in positive territory on Tuesday. The pair holds steady slightly above 1.0750 early Wednesday.

Following a consolidation phase at around 1.2200 in the Asian session on Wednesday, GBP/USD turned north and climbed above 1.2250 in the European morning. The UK's Office for National Statistics reported that annual inflation in the UK, as measured by the Consumer Price Index (CPI), jumped to 10.4% in February from 10.1% in January. This reading surpassed the market expectation of 9.8% and provided a boost to Pound Sterling ahead of the Bank of England's (BOE) policy announcements on Thursday.

USD/JPY registered strong daily gains on the back of rising US T-bond yields on Tuesday. The pair trades in a tight range at around 132.50 in the European morning.

Following the rejection from the $2,000 area at the beginning of the week, Gold price extended its downward correction on Tuesday and broke below $1,940. XAU/USD holds steady near $1,940 early Wednesday.

Bitcoin registered small daily gains on Tuesday and continues to in a tight range above $28,000 early Wednesday. After having lost nearly 3% on Monday, Ethereum regained its traction and rose nearly 4% on Tuesday. ETH/USD fluctuates in a tight channel at around $1,800 in the early European session.

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD remains depressed near 1.0700 ahead of Lagarde, US data

EUR/USD remains depressed near 1.0700 ahead of Lagarde, US data

EUR/USD is trading close to 1.0700, on the defensive in the European session. The US Dollar is extending post-US NFP gains amid cautious optimism, as investors assess the Fed rates outlook. Eurozone Sentix data slumps to -17.1 in June. Lagarde, US data awaited. 

EUR/USD News

GBP/USD drops below 1.2400 amid firmer US Dollar

GBP/USD drops below 1.2400 amid firmer US Dollar

GBP/USD is falling below 1.2400 amid a notable US Dollar demand, dragging the major lower for the second successive day on Monday. Markets repricing of the Fed interest rates outlook push the US Treasury bond yields higher, in turn, the US Dollar. US ISM Services PMI next of note. 

GBP/USD News

Gold finds short-term cushion above $1,940, more downside looks solid

Gold finds short-term cushion above $1,940, more downside looks solid

Gold price has found a short-term cushion near $1,943.00, however, more downside seems favored. Gold price witnessed an intense sell-off after a mean-reversion move to near the 200-period EMA at $1,977.32.

Gold News

Pro-XRP attorney says Ripple has 25% chance of winning against SEC, Judge could announce verdict by September

Pro-XRP attorney says Ripple has 25% chance of winning against SEC, Judge could announce verdict by September

Ripple has a 25% chance of winning its legal battle against  the US SEC, according to pro-XRP attorney John Deaton. Over the weekend, Deaton shared his opinion on Ripple’s likelihood of both an outright win and a partial victory. 

Read more

Services PMIs the next focus after last week’s bumper US jobs report

Services PMIs the next focus after last week’s bumper US jobs report

While US markets finished the week on a high, after another bumper jobs report and a positive week across the board, markets in Europe, while finishing the week on a high, struggled to match the exuberance of investors on the other side of the Atlantic.

Read more

Forex MAJORS

Cryptocurrencies

Signatures