Forex Today: The Fed smashes the dollar

FXStreet Team FXStreet

What you need to know on Thursday, March 18:

The dollar plummeted with the US Federal Reserve decision. As widely anticipated, the central bank left rates and quantitative easing unchanged. The Fed’s Summary of Projections showed on Wednesday that four policymakers see a lift-off in the fed funds rate from zero in 2022, compared to only one policymaker in December's publication. Additionally, the number of policymakers who see a lift-off in the fed funds rate from zero in 2023 rose to seven from five in December.

The yield on the benchmark 10-year Treasury note soared to 1.689% ahead of the Fed, but trimmed most of its intraday gains ahead of the close, ending the day at 1.64%.

Wall Street ended in the green, after a soft start to the day. The DJIA and the S&P closed at record levels after the Fed reaffirmed its ultra-loose monetary policy.

EUR/USD approaches 1.2000, while GBP/USD trades around 1.3960, cautiously bullish ahead of BOE’s Monetary Policy decision on Thursday. Commodity-lined currencies were the best performers, with AUD/USD above 0.7800 and USD/CAD at fresh yearly lows around 1.2400. The USD/JPY pair is little changed down to 108.80.

Gold advanced to 1,750, ending the day at $ 1,744 a troy ounce. WTI was little changed, with the barrel trading at $64.50.

Fed Quick Analysis: Dovish dots down dollar, why this may be a buy opportunity

Ethereum price must hold this critical point to reach $2,300

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

GBP/USD turns negative; slips back to 1.3530

GBP/USD comes under pressure and weakens toward the 1.3530 zone on Tuesday. Cable thus leaves behind two daily upticks in a row and retreats further from Monday’s multi-week tops past 1.3570 following humble gains in the Greenback and disheartening UK jobs data.

EUR/USD back to square one near 1.1580

EUR/USD trims its earlier gains and retests the 1.1580 region in the latter part of the NA session on Tuesday. Indeed, the pair falls into the generalised consolidative theme prevailing in the FX space amid marginal gains in the US Dollar, steady uncertainty in the geopolitical landscape and diminishing bets for further Fed rate hikes.

Gold remains offered around $4,350

Gold accelerates its daily correction and revisits the $4,350 zone per troy ounce on Tuesday. The precious metal sets aside two daily advances in a row and follows the absence of direction in the US Dollar, declining US Treasury yields across the curve and continuous uncertainty in the Middle East crisis.

Crypto Today: Bitcoin, Ethereum, XRP falter amid escalating US-Iran tensions

Cryptocurrency prices are broadly correcting on Tuesday, with Bitcoin edging lower toward $64,000. Ethereum shows weakness amid ongoing narrow-range consolidation, while Ripple trades below $1.00, weighed down by falling technical indicators.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.