Here is what you need to know on Thursday, March 23:
On a volatile session, Wall Street finished lower on Fed’s monetary policy decision day. The US central bank raised rates as expected by 25 bps. The end of the tightening cycle is near as the Federal Reserve balances between elevated inflation and banking turmoil. Stocks jumped after the announcement but then pulled back, making a reversal, helped by US Treasury Secretary Janet Yellen’s comments. She said they are not considering “blanket insurance” for bank deposits.
US yields dropped on Wednesday, with the US 10-year falling to 3.43% and the 2-year to 3.92%. The US Dollar Index lost 0.65%, falling for the fifth consecutive day. Despite reaching weekly lows against most of its rivals, the greenback finished far from the lows, giving some positive signs. Volatility across the FX board will likely stay elevated and could trigger a broad-based recovery or send the Dollar to fresh lows.
The Japanese Yen was among the top performers, helped by the decline in US yields. USD/JPY posted the second-lowest close in a month, below 131.50.
The Euro also rose across the board, supported by comments from European Central Bank (ECB) officials that suggest that if the banking crisis eases, more rate hikes seem the way to go. The combination of a weaker US Dollar post-FOMC and a robust Euro, sent EUR/USD to 1.0911, the highest since February 2, before retreating to 1.0860.
The Bank of England is likely to deliver another rate hike on Thursday after its Monetary Policy Committee meeting. Forecast consensus point to an increase of 25 bps, particularly after inflation accelerated unexpectedly in February, with the annual rate rising to 10.4%. GBP/USD hit levels above 1.2300 on Wednesday, but finished around 1.2260. It still holds a bullish bias, but continues to be unable to consolidate above 1.2300.
USD/CHF dropped below 0.9200 to the lowest in a week. The Swiss National Bank (SNB) announces its monetary policy decision on Thursday, with market participants expecting a rate hike of 50 bps to 1.50%.
SNB Preview: Forecasts from six major banks, acting with caution
Commodity currencies were hit by the decline in equity prices on Wall Street. AUD/USD reversed sharply from 0.6759 to 0.6680, NZD/USD approached 0.6300 and ended closer to 0.6200 while USD/CAD spiked down to 1.3655, to finish the day higher above 1.3730. Stocks are driving the directions of the pairs at the moment.
Bitcoin tumbled after the FOMC meeting, falling from $28,800 to as low as $27,700. Gold and Silver jumped, boosted by lower US yields. Crude oil prices finished practically flat after reaching weekly highs.
Like this article? Help us with some feedback by answering this survey:
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.
Recommended content
Editors’ Picks
EUR/USD regains 1.0700 as US Dollar stays on the back foot
EUR/USD is trading above 1.0700, as bulls keep the reins for the second consecutive day early Thursday. The major currency pair fails to justify looming economic fears and upbeat US Treasury bond yields amid a broadly weaker US Dollar. Final Eurozone Q1 GDP eyed.
GBP/USD bulls ignore mixed BoE clues to prod 1.2450 as June Fed rate hike appears elusive
GBP/USD buyers occupy driver’s seat around 1.2450, despite marking a slow run towards the north heading into Thursday’s London open. The Cable pair buyers cheer the receding odds of a Fed rate hike in June while early signals for the Bank of England’s (BoE) interest rate guide appear mixed.
Gold to maintain $1,930 support on mixed growth, Fed concerns
Gold seesaws around intraday high as it prints mild gains after falling the most in a week the previous day. Even so, the XAU/USD remains indecisive on a weekly basis as the markets struggle for clear directions amid the pre-Fed blackout and mixed feelings about global growth concerns.
Dogecoin price could rally 30% if DOGE history over the last six months is enough to go by
Dogecoin price has been trading within a fixed range over the last six months, taking seasonal leaps as volatility increased. With this accumulation pattern, the king of meme coins could be en route to complete the next bounce cycle.
Plenty of hawkishness to go around
/stock-market-graph-gm529236845-54345172_XtraSmall.jpg)
We haven’t seen a lot in the way of volatility and price action this week, but what we have seen is a clear message coming from many central banks. That message is one of hawkishness.