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.

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EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold hits a fresh record high as rising geopolitical risks boost safe-haven demand

Gold scales higher for the third straight day and climbs to a fresh all-time peak, beyond the $4,550 level, during the Asian session on Monday. Reports that US President Donald Trump is weighing a series of potential military options in Iran following deadly protests in the country fuel the risk of a further escalation of geopolitical tensions amid the protracted Russia-Ukraine war. This, along with rising bets for more rate cuts by the Fed, offsets the recent US Dollar rally and is seen benefiting the safe-haven bullion.

Week ahead: US CPI might challenge the geopolitics-boosted Dollar

Geopolitics may try to steal the limelight from US data. A possible US Supreme Court ruling on tariffs could dictate market movements. Dollar strength might be tested if investors refocus on Fed expectations. A crammed data calendar next week, US CPI comes on Tuesday; Fedspeak to intensify. Euro weakness persists, lingering risk of deterioration in US-EU relations.

Week ahead – US CPI might challenge the geopolitics-boosted Dollar

Geopolitics may try to steal the limelight from US data. A possible US Supreme Court ruling on tariffs could dictate market movements. A crammed data calendar next week, US CPI comes on Tuesday; Fedspeak to intensify.

XRP trades under pressure amid weak retail demand

XRP presses down on the 50-day EMA support as risk-averse sentiment spreads despite a positive start to 2026. XRP faces declining retail demand, as reflected in futures Open Interest, which has fallen to $4.15 billion.