Forex Today: The Fed smashes the dollar

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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