Новини ринків

• USD/CAD gains ground to around 1.4320 in Wednesday’s late American session.
• The Fed kept its benchmark federal funds rate in a range of 4.25%-4.5% at its March meeting on Wednesday. 
• Traders brace for the BoC's Governor Macklem speech.

The USD/CAD pair gathers strength to around 1.4320 during the late American session on Wednesday. The Greenback edges higher against the Canadian Dollar (CAD) as the Federal Reserve (Fed) held the interest rate steady at the March meeting, as expected. The Bank of Canada (BoC) Governor Tiff Macklem is scheduled to speak later on Thursday about tariff-related uncertainty.

The US central bank decided to hold its benchmark interest rate steady for a second straight meeting on Wednesday amid mounting concerns that the economy is slowing and inflation could remain stubbornly high. Fed Chair Jerome Powell emphasized the high degree of uncertainty from US President Donald Trump’s significant policy changes, adding that the Fed officials can wait for more clarity on the impact of those policies on the economy before acting.

New economic projections indicated that Fed officials marked down their forecasts for growth this year, but they still see another half percentage point of rate cuts through 2025. The more hawkish remarks from Fed officials on rates from December provide some support to the US Dollar (USD) broadly. 

On the other hand, a rebound in Crude Oil prices amid the rising geopolitical tensions in the Middle East could boost the commodity-linked Loonie and create a headwind for USD/CAD. It’s worth noting that Canada is the largest oil exporter to the United States (US), and higher crude oil prices tend to have a positive impact on the CAD value.

• GBP/JPY falls to 193.28, ending three-day rally after failing to surpass 195.00 and 200-day SMA at 194.18.
• Trading sideways; support at 193.23 (100-day SMA) and 192.28 (Senkou Span B) maintains range-bound status.
• Break below 192.28 could target 191.83 (Tenkan-sen); push above 194.89 may challenge 195.00 resistance.

The GBP/JPY retreats after rallying for three straight trading days since last Friday. However, it struggled to clear the 195.00 figure and the 200-day Simple Moving Average (SMA), which exacerbated a drop in the cross pair beneath the 193.50 area. At the time of writing, the pair hovers near 193.28, virtually unchanged.

GBP/JPY Price Forecast: Technical outlook

The GBP/JPY trades sideways for the second straight day, capped on the downside by the 100-day Simple Moving Average (SMA) at 193.23 and the Senkou Span B near 192.28. On the top side, the 200-day SMA at 194.18 would likely keep the pair trading range bound.

Additionally, despite being bullish, the Relative Strength Index (RSI) is flat. Hence, buyers and sellers lack the strength to break the trading range.

If GBP/JPY falls below 192.28, the next support would be the Tenkan-sen at 191.83, followed by the Kijun-sen at 191.24. Conversely, if GBP/JPY climbs past the 200-day SMA, the next resistance would be the March 18 peak at 194.89, ahead of 195.00.

GBP/JPY Price Chart – Daily

New Zealand's Gross Domestic Product (GDP) grew by 0.7% QoQ in the fourth quarter (Q4) compared with a 1.1% contraction (revised from -1.0%) in the third quarter, Statistics New Zealand showed on Thursday. This reading came in stronger than expectations of 0.4%.

The annual fourth-quarter GDP contracted by 1.1%, compared with a decline of 0.3% in Q3, while beating the estimation of a 1.4% fall.

Market reaction to New Zealand’s GDP data

The New Zealand Dollar attracts some buyers in an immediate reaction to the upbeat GDP report.  The NZD/USD pair is trading at 0.5825, adding 0.10% on the day.

• NZD/USD holds around 0.5810, posting a neutral session after reversing earlier losses.
• Despite bulls fighting back, indicators seem to have stalled in positive territory, limiting further upside potential.

NZD/USD traded near the 0.5810 area on Wednesday ahead of the Asian session, marking a day of choppy price action. The pair initially saw mild losses but managed to stabilize, as bulls stepped in to defend recent gains.

Technical indicators show a mixed picture. The Relative Strength Index (RSI) is positioned near the overbought zone but is declining sharply, indicating a slowdown in buying momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) is still printing rising green bars, suggesting the broader trend remains bullish despite some hesitation.

On the downside, immediate support is found at 0.5775, aligning with the 20-day Simple Moving Average (SMA). A break below this level could expose further weakness toward 0.5730. To the upside, resistance sits near 0.5850, followed by a key hurdle at 0.5900.

NZD/USD daily chart

• AUD/JPY was seen trading around the 94.50 zone ahead of the Asian session, marking its second consecutive decline.
• The 20-day SMA near 94.00 is coming into focus, with a break below signaling a potential shift in sentiment.
• Traders should monitor the RSI as it approaches the 50 mark, as a drop below could reinforce bearish momentum.

AUD/JPY extended its decline on Wednesday ahead of the Asian session, slipping toward the 94.50 area after a second consecutive day in the red. The retreat comes after the pair struggled to maintain momentum above recent highs, suggesting a cooling of bullish sentiment.

The Relative Strength Index (RSI) is declining, now hovering near the neutral 50 mark. A move below this threshold could indicate growing bearish pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) is printing flat green bars, signaling waning upside momentum.

The immediate support level is located at the 20-day Simple Moving Average (SMA) near 94.00, a key level that, if breached, could open the door for further declines. Below that, additional support lies at 93.50. On the upside, resistance is seen at 95.00, followed by a more significant barrier near 96.00.

AUD/JPY daily chart

• Silver retreats to $33.78 from $34.09 high after Fed holds rates, citing economic uncertainty.
• Bearish patterns, including 'quasi-shooting star' and 'hanging man,' suggest potential further declines.
• Key support at $33.39; break below could expose $33.00. Resistance at $34.51 and $35.00 if bulls rally.

Silver price finished the day with a loss of over 0.55% on Wednesday after the Federal Reserve (Fed) held rates unchanged while acknowledging the economic outlook is uncertain due to US trade policies implemented by President Donald Trump. At the time of writing, the XAG/USD trades at $33.78 after hitting a daily high of $34.09.

XAG/USD Price Forecast: Technical outlook

Price action during the last couple of days opened the door for further downside on Silver prices. A ‘quasi-shooting star’ followed by a ‘hanging man’ indicates that sellers are driving XAG/USD beneath the $34.00 figure. This could sponsor a retracement if the grey metal drops below the February 14 daily peak of $33.39. A breach of the latter will expose the $33.00 figure.

If XAG/USD rises past $34.00, the following key resistance would be October 30, 2024, peaking at $34.51, followed by the $35.00 mark.

XAG/USD Price Chart – Daily

The Greenback managed to regain some balance and set aside three consecutive daily pullbacks after the Fed maintained its interest rates at its meeting, as widely anticipated.

Here is what you need to know on Thursday, March 20:

The US Dollar Index (DXY) regain some buying traction and bounced off the area of multi-month lows despite a post-Fed pullback in US yields across the curve. The usual weekly Initial Jobless Claims are due, seconded by the Philly Fed Manufacturing Index, Existing Home Sales, and the CB Leading Index.

EUR/USD retreated markedly and returned to the sub-1.0900 region in response to the improved sentiment around the Greenback. Producer Prices in Germany will be released along with the Construction Output in the broader euro area. In addition,   the ECB’s Lagarde and Lane are due to speak.

GBP/USD came under renewed selling pressure and retested the area of two-day lows near 1.2960, just to bounce afterwards. A very interesting UK calendar will see the BoE’s interest rate decision, seconded by the release of the labour market report and the CBI Industrial Trends Orders.

USD/JPY gave away the initial move past 150.00 and retreated to the 148.80 zone following the Fed’s decision. Next on tap on the Japanese calendar will be the release of the Inflation Rate and weekly Foreign Bond Investment figures.

AUD/USD kept the offered stance in place and dropped to the low-0.6300s, approaching three-day lows at the same time. The Australian labour market report will be the sole release in Oz.

WTI prices advanced modestly above the $67.00 mark per barrel amid traders’ assessment of the ongoing US trade policy as well as geopolitical news from the Russia-Ukraine war.

Gold prices advanced to a record peak past the $3,050 mark per troy ounce after the Fed hinted at two rate cuts this year and US yields receded across the board. Silver prices faced some downside pressure after climbing to yearly peaks past the $34.00 mark per ounce in the previous day.

• Gold fluctuates around $3,035–$3,050, gaining after Fed holds rates and slows balance sheet reduction.
• Powell cites rising economic uncertainty and tariff-driven inflation; Fed anticipates two rate cuts in 2024.
• Geopolitical tensions mount as Russia-Ukraine ceasefire talks stall and Israel intensifies airstrikes, boosting safe-haven demand.

Gold prices rallied sharply and hit a new all-time high of $3,052 on Wednesday as US Federal Reserve (Fed) Chair Jerome Powell spoke following the Fed’s decision to hold rates unchanged. At the time of writing, the XAU/USD trades volatile within the $3,035-$3,050 range, up more than 0.20%.

The Fed decided to keep rates unchanged at the 4.25%-4.50% range and tweaked its balance sheet, which is expected to run off in April. The Fed acknowledged that labor market conditions remain solid but noted that inflation remains "somewhat" elevated, reaffirming its commitment to monitoring risks to both sides of its dual mandate.

Fed economic projections hinted that officials expect two rate cuts this year. The fed funds rate is forecast to remain at 3.9%, unchanged from December’s projections. Other projections, like inflation and the Unemployment Rate, were upwardly revised.

On the other hand, the US economy is expected to slow below the 2% threshold, indicating that it became slightly fragile amid US President Donald Trump's trade policies.

Following the US central bank decision, Jerome Powell took the stand. He said that “uncertainty around the (economic) outlook has increased,” adding that some tariff inflation has been passed on to consumers. Powell commented, "Our current policy stance is well positioned to deal with the risk and uncertainties we face.”

Turning to geopolitics, hostilities between Russia and Ukraine continued despite talks to achieve a 30-day ceasefire from attacking energy facilities. In the meantime, the Middle East conflict escalated, with Israeli airstrikes killing 400 people on Tuesday, according to Reuters.

Daily digest market movers: Gold price poised to extend rally as real yields plunge

• The US 10-year T-note yield drops three basis points (bps) to 4.254%. At the same time, the US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, rises 0.27% up to 103.54.
• US real yields, as measured by the US 10-year Treasury Inflation-Protected Securities (TIPS) yield, which correlates inversely to Gold prices, dropped five-and-a-half bps to 1.935% via Reuters.
• The Federal Reserve’s Summary of Economic Projections (SEP) includes forecasts of interest rates, growth, the labor market and inflation.
• The fed funds rate is expected at 3.9%, unchanged in 2025, at 3.4% in 2026 and 3.1% for 2027. The US economy is projected to grow 1.7% in 2025, down from 2.1%. For 2026 and 2027 it is projected to remain at 1.8%.
• The Unemployment Rate is expected to hover near the 4.3%-4.4% range from 2025 to 2027, while PCE inflation would end 2025 at 2.7%, at 2.2% in 2026, and 2% in 2027.
• Lastly, the core PCE is foreseen to end at 2.8% this year, up from 2.5%. It would dip toward the Fed’s target of 2% until 2027.
• The money market has priced in 65.5 basis points of Fed easing in 2025, which has sent US Treasury yields plunging alongside the American currency.

XAU/USD technical outlook: Gold price conquers $3,000 and is set to end above that level

Gold’s uptrend remains intact, and it is poised to extend its gain and challenge the $3,100 figure. The precious metal already printed a record high of $3,052, clearing the psychological $3,050 mark, but it has lacked the strength to aim decisively to reach a new milestone.

The Relative Strength Index (RSI) turned overbought, but due to the strength of the uptrend it remains shy of reaching the 80 level.

Conversely, if XAU/USD tumbles below $3,000, the first support would be the February 20 daily high at $2,954, followed by the $2,900 mark.

• Equity markets rallied after the Fed stuck to its guns on 2025 rate cuts.
• Despite growing risks and concerns, especially around tariffs, Fed still sees rate cut hope.
• Dow climbed over 500 points, while the S&P 500 added 90 points.

The Dow Jones Industrial Average (DJIA) gained ground on Wednesday, adding around 540 points at its peaks with equities climbing higher after the Federal Reserve (Fed) gave a nod to still expecting around two rate cuts through the remainder of the year. Despite growing headwinds from ham-handed policy from the Trump administration, Fed policymakers continue to lean on signs of still-strong growth and strength within the US labor market, even as growth forecasts get another haircut.

The Dow Jones climbed back over the 42,000 major price handle and the Standard and Poor’s 500 (S&P 500) rose around 1.5% as equities tilted back into the bullish side following the latest rate call from the Fed. Fed Chair Jerome Powell noted that growth projections for 2025 have been significantly hindered by the Trump administration's erratic policy of announcing trade tariffs on social media only to later retract them. As a result, the Federal Open Market Committee (FOMC) revised its end-2025 Gross Domestic Product (GDP) forecast to 1.7%, a sharp decline from the 2.1% estimate shared in December.

Fed's Powell: We are not going to be in any hurry to move on rate cuts

Additionally, the median dot plot suggests that the end-2025 interest rate will remain at 3.9%, indicating little change since the last policy meeting. The FOMC plans to begin slowing down its balance sheet runoff starting in April. Rate markets continue to signal a greater than 50% chance of a quarter-point rate cut in June, with most rate traders assigning a 65% probability of a quarter-point or larger cut on June 18.

Despite rising risks to the US economy from lagging growth metrics and increasing concerns that the US's erratic tariff policy could trigger both new inflation and an economic recession simultaneously, Fed Chair Jerome Powell stated on Wednesday that the current economic outlook remains generally healthy, and the Fed is not in a hurry to alter its expectations of at least two more rate cuts later in the year.

This policy outlook aligns with the aggregate score of Fed policymaker speeches, evaluated by FXStreet's internal Fed Sentiment Index, which indicates that Fed speakers have been vocal about the increasing risks and concerns facing the US economy. However, the overall sentiment remains slightly toward the dovish side, though close to neutral, as the Fed awaits clearer data direction.

In other stock news, Boeing is back on the rise as order filling for 737 jets take off.

Dow Jones price forecast

Despite Wednesday’s bullish print, the Dow remains hindered by the 200-day Exponential Moving Average (EMA) near the 42,000 key handle. Price action has gathered its feet back under it following a near-term plunge that saw major equity indexes test into correction territory, but bids remain on the hopeful side as technical barriers weigh.

Dow Jones daily chart

The Federal Open Market Committee’s (FOMC) latest dot plot indicates that interest rates will average 3.9% by the end of 2025, matching the December projection.

If this forecast comes true, the Federal Reserve (Fed) could implement two 25 basis points (bps) rate cuts or a single 50 bps cut in 2025.

In 2026, rates are projected to fall to 3.4% and 3.1% in 2027, as projected in the December dot plot. The longer-term forecast remains at 3.0%.

The Fed also revised its economic projections. US GDP is now projected to reach 1.7% this year, down from the previous forecast of 2.1%. For 2026, the economy is expected to grow by 1.8%, below the 2.0% estimated in December.

The unemployment rate is expected to rise to 4.4% by the end of 2025, compared to the 4.3% previously estimated. For 2026 and 2027, it remains unchanged at 4.3%, in line with the December forecast.

Finally, PCE inflation is estimated to rise to 2.7% by the end of the year, up from the 2.5% previously forecast. In 2026, inflation is expected to ease to 2.2%, slightly higher than the 2.1% projected in December. By 2027, the PCE index is expected to reach 2.0%, meeting December's expectations.

• USD/JPY hovers near 149.37, little changed after the Fed keeps rates unchanged but slows balance sheet reduction.
• Inflation remains “somewhat” elevated, with the Fed revising PCE and Core PCE higher, while GDP and unemployment estimates were lowered.
• Fed Governor Waller dissents, favoring an unchanged pace of balance sheet reduction, as markets digest mixed policy signals.

The USD/JPY climbs in Wednesday after the Federal Open Market Committee's (FOMC) decision to keep rates unchanged. Even though officials turned cautious on rates, the US Dollar failed to rally sharply. The pair hovers near 149.37, virtually unchanged.

Dollar struggles to rally despite Fed’s cautious stance on inflation and policy

In its monetary policy statement, the Federal Reserve acknowledged that labor market conditions remain solid but noted that inflation remains "somewhat" elevated. The FOMC reaffirmed its commitment to monitoring risks to both sides of its dual mandate and announced plans to slow the pace of balance sheet reduction starting in April.

The decision was unanimous, except for Fed Governor Christopher Waller, who preferred to keep the pace of balance sheet reduction unchanged.

In the Summary of Economic Projections (SEP), the Fed funds rate projection remained at 3.9%, unchanged from December's forecast. Officials' projections for inflation remained upwardly revised, both PCE and Core PCE figures.

The US economy is expected to slow down below the 2% threshold, an indication that the economy shifted fragile amid US President Donald Trump's trade policies.

Source: Federal Reserve

USD/JPY Rection to Fed’s decision

• Gold bids jump after Fed releases latest rate call and dot plot.
• Growth expectations in 2025 are getting hampered by lopsided US policy calls.
• Markets await Fed Chair Powell's latest press conference.

On Wednesday, Gold surged, reaching $3,040 during intraday trading as the Federal Reserve (Fed) made its latest interest rate decision, keeping rates unchanged at 4.5%. While markets generally anticipated this hold, any modifications to the Fed's outlook could unsettle investors who are awaiting comments from Fed Chair Jerome Powell.

The Fed noted that growth projections for 2025 have been significantly hindered by the Trump administration's erratic policy of announcing trade tariffs on social media only to later retract them. As a result, the Federal Open Market Committee (FOMC) revised its end-2025 Gross Domestic Product (GDP) forecast to 1.7%, a sharp decline from the 2.1% estimate shared in December.

Additionally, the median dot plot suggests the end-2025 interest rate will remain at 3.9%, showing little change since the last policy meeting. The FOMC plans to slow down its balance sheet runoff starting in April. Rate markets still indicate a greater than 50% chance of a quarter-point rate cut in June, although the likelihood has slightly decreased, with 42% of traders expecting rates to stay the same.

More to come...

• AUD/USD dips to 0.6340 as the US Dollar remains resilient post-Fed decision.
• The Federal Reserve leaves interest rates unchanged at 4.5%, aligning with market expectations.
• FOMC dot plot signals rate cuts ahead, with 2025 median forecast revised lower to 3.375%.

The AUD/USD pair retreats toward 0.6340 in the aftermath of the Federal Reserve’s monetary policy decision, as the US Dollar (USD) remains firm. The Fed held interest rates steady at 4.5%, in line with expectations, while signaling a cautious outlook amid inflation and economic uncertainties.

The latest FOMC dot plot revealed that policymakers project a median rate of 3.875% for the current period, down from the previous 4.375%, reinforcing expectations of a policy easing cycle. The 2025 rate forecast was also revised down to 3.375%, while GDP projections for next year were cut to 1.7% from 2.1%, suggesting a slowdown in economic growth.

Despite the dovish long-term outlook, the US Dollar Index remains stable near 104.00, limiting the Aussie’s upside. The Fed also announced a slower pace of balance sheet runoff starting in April, adjusting its quantitative tightening strategy. In addition, the Fed's sentiment index on the daily chart holds in dovish terrain meaninig that markets are taking the bank's stance as dovish.

AUD/USD daily chart 

• GBP/USD jumped after Fed scrubs growth projections on policy concerns.
• Fed long-run inflation expectations stuck at 3.0%, Fed funds rate expectations pinned at 3.9%.
• Rate markets still see odds of a rate cut in June, but hope is dwindling fast.

GBP/USD lurched higher on Wednesday, tapping 1.2985 in intraday trading after the Federal Reserve's (Fed) latest rate call came in broadly as expected, with the Fed keeping rates steady at 4.5%. Markets broadly anticipated another hold from the Fed, but adjustments to the Fed's expectations could throw markets for a loop as investors await Fed Chair Jerome Powell's press conference.

According to the Fed, growth expectations for 2025 have been severely hampered by the Trump administration's policy approach of announcing then walking back trade tariffs via social media post. The Federal Open Market Committee (FOMC) trimmed its end-2025 Gross Domestic Product (GDP) forecast at just 1.7%, down sharply from the 2.1% forecast posted in December.

The median dot plot of interest rates also sees the end-2025 interest rate stuck at 3.9%, remaining largely unchanged from the previous policy meeting. The FOMC has also decided to slow its balance sheet runoff beginning in April. Rate markets are still pricing in better-than-even odds that the Fed will still deliver a quarter-point rate cut in June, but the margin has shrunk slightly with 42% of rate traders expecting no change at all.

More to come...

• EUR/USD climbs post-Fed, as policymakers keep rates unchanged but hint at a slower balance sheet runoff starting in April.
• Inflation remains “somewhat” elevated, with the Fed revising PCE and Core PCE higher, while GDP and unemployment estimates were lowered.
• Fed Governor Waller dissents, favoring an unchanged pace of balance sheet reduction, as markets digest mixed policy signals.

The EUR/USD spkied on Wednesday after the US Federal Reserve decided to keep interest rates unchanged despite adopting a slightly hawkish approach to the future path of interest rates. At the time of writing, the pair trades volatile within the 1.0860 – 1.0900 mark, down 0.49% on the day.

Pair trades volatile near 1.0860–1.0900 amid hawkish Fed outlook

In its monetary policy statement, the Fed commented that labor market conditions remain solid but emphasized that inflation remains “somewhat” elevated. The Committee mentioned that it would remain attentive to the risk of both dual mandates and will begin to reduce the pace of the balance sheet runoff in April.

The decision was unanimously approved, except for Fed Governor Christopher Waller, who favored keeping the balance sheet pace unchanged.

Regarding the Summary of Economic Projections (SEP), officials expect the fed funds rate to remain unchanged at 3.9% from December’s SEP while upwardly reviewing expectations on PCE inflation and Core PCE. On the other hand, the Gross Domestic Product (GDP) and the Unemployment Rate were downwardly revised.

Source: Federal Reserve

EUR/USD reaction to Fed’s decision

The EUR/USD dropped to 1.0862, before resuming to the upside, reaching 1.0892, but meanders within that range. Traders await the Fed Chair Jerome Powell's press conference at 18:30 GMT.

• The Federal Reserve leaves interest rates unchanged at 4.5%, aligning with market expectations.
• FOMC dot plot signals rate cuts, with the median forecast for 2025 revised down to 3.375%.
• US Dollar Index (DXY) gains around 104.00 despite dovish sentiment on future policy easing.

The US Dollar Index (DXY) is gaining traction near 104.00 after the Federal Reserve decided to keep its benchmark interest rate at 4.5%, maintaining a cautious stance amid evolving inflation and economic conditions. The latest FOMC dot plot revealed that policymakers expect a median rate of 3.875% for the current period, down from the prior 4.375%, reinforcing expectations of future rate cuts.

Looking ahead, the Fed revised its 2025 rate forecast lower to 3.375%, a signal of potential policy easing in response to slower economic growth and elevated inflation projections. GDP expectations for 2025 have been downgraded to 1.7% from 2.1%, while unemployment is now forecasted at 4.4%, suggesting a softer labor market outlook.

Despite the dovish forward guidance, the US Dollar Index remains resilient, reflecting cautious optimism among investors. The Fed also announced a slower balance sheet runoff starting in April, adjusting its quantitative tightening approach. Market participants now turn their focus to chair Powell's presser.

DXY daily chart

• The Dow Jones remains stuck just below the 42,000 level on Wednesday.
• Markets are bracing for an update to the Fed’s dot plot of interest rate expectations.
• Investors remain hopeful, but dark turns in consumer data are getting hard to ignore.

The Dow Jones Industrial Average (DJIA) held steady within familiar territory on Wednesday, but holding a bullish stance as investors gear up for another showing from the Federal Reserve (Fed). The Fed’s latest rate call is broadly expected to be another hold on interest rates, but an update to the Federal Open Market Committee’s (FOMC) Summary of Economic Projections (SEP) will be drawing all market eyes.

The Fed’s SEP, or “dot plot” of interest rate expectations, could have huge ramifications for markets that have, up until this point, continued to tilt into hopes of continued rate cuts during the latter months of 2025. Fed policymakers tend to have a more accurate track record of estimating upcoming changes in policy rates, and the median of the dot plot will drive interest rate expectations accordingly.

Dow Jones price forecast

The Dow Jones is treading water just beneath the key 42,000 handle, and price action is being kept under a tight lid by the 200-day Exponential Moving Average (EMA). Chart watchers have seen the Dow take a sharp tumble in recent weeks, and candles could be due for another topside run as technical oscillators begin to climb out of oversold territory.

Dow Jones daily chart

• Mexican Peso down 0.53%, USD/MXN hits 20.00 as markets await FOMC decision.
• US Dollar rises 0.47% to 103.72 on DXY; global equities rally amid Fed uncertainty.
• Banxico's next move in focus; Mexico’s Aggregate Demand and Private Spending data are due Thursday.

The Mexican Peso (MXN) lost some ground against the US Dollar (USD) in early trading on Wednesday as market players awaited the US Federal Open Market Committee’s (FOMC) monetary policy decision, hence reducing their exposure to high-beta currencies like the Peso. The USD/MXN trades back above 20.00, up 0.53%.

Global equities register gains, unusual on a Fed decision day, while the Greenback recovers some ground as depicted by the US Dollar Index (DXY) rising 0.47% to 103.72. Aside from the Fed, the Mexico and US economic dockets are absent.

USD/MXN traders will pay attention to the Fed, which is expected to hold rates unchanged at the 4.25%-4.50% range. In the latest Summary of Economic Projections (SEP), officials projected just two rate cuts in the year. Still, doubts linger after Fed policymakers emphasized that policy is well positioned and that they’re not in a rush to resume interest rate cuts.

On Thursday, Mexico’s economic docket will feature the release of Aggregate Demand and Private Spending data. The data could shed some light on current economic conditions and give some cues about Banco de Mexico’s (Banxico) next policy move in the March 27 monetary policy meeting.

Dail digest market movers: Mexican Peso on the defensive amid strong US Dollar

• The Organization for Economic Cooperation and Development (OECD) revealed earlier this week that US tariffs on Mexican products could spur a recession in Mexico. If duties remain unchanged, the OECD projects Mexico’s economy would shrink -1.3% in 2025 and -0.6% in 2026.
• Last Wednesday, Mexican Finance Minister Edgar Amador Zamora said the national economy is expanding but is showing signs of slowing down due to trade tensions with the US.
• Traders had priced the Fed to ease policy by 57 basis points (bps) throughout the year. Nevertheless, President Donald Trump's inflation-prone US trade policies could prevent the US central bank from continuing its cutting rates cycle and waiting to assess the impact on the economy.
• So far, an Atlanta Fed model updated on March 18 shows that the Gross Domestic Product (GDP) is expected to contract -1.8% in Q1 2025.

USD/MXN technical outlook: Mexican Peso retreats as USD/MXN climbs above 20.00

USD/MXN seems to have bottomed near the 19.89–20.00 range as traders await a fresh catalyst. A hawkish tilt by the Fed could refresh weekly highs and clear the path to challenging the 100-day Simple Moving Average (SMA) at 20.35. If surpassed, the next stop would be the 50-day SMA at 20.42.

Conversely, if USD/MXN tumbles beneath 19.90, traders could expect a fall to test the 200-day Simple Moving Average (SMA) at 19.65. Once hurdled, the next key support levels would be 19.50, 19.00, and the August 20, 2024 low at 18.64.

• EUR/USD was seen trading around the 1.0895 area after the European session, posting a moderate decline.
• The pair confirms a corrective phase as buyers lose grip, with the recent price action suggesting further downside.
• RSI is escaping the overbought zone, signaling the potential for extended losses if bearish momentum builds.

EUR/USD moved lower on Wednesday after the European session, retreating toward the 1.0895 zone following recent strong gains. The pair’s correction was largely anticipated as momentum indicators flashed overbought signals earlier in the week.

From a technical perspective, the Relative Strength Index (RSI) is moving sharply lower, now exiting overbought conditions. This suggests that selling pressure may persist in the near term. Meanwhile, the Moving Average Convergence Divergence (MACD) is printing flat green bars, signaling a potential loss of bullish momentum.

Support is now seen at the 1.0850 zone, with stronger demand likely emerging around 1.0800. On the upside, resistance stands at 1.0950, followed by 1.1000, which remains a key hurdle for buyers.

EUR/USD daily chart

With the RSI breaking out of overbought territory, traders should watch for further downside in the coming sessions. If selling pressure intensifies, EUR/USD could extend losses toward the 1.0800 region, while a recovery above 1.0950 would be needed to reignite bullish momentum.

• GBP/USD drops 0.20% to 1.2971, retreating from a daily high above 1.30 as the US Dollar strengthens.
• Markets price in 57 bps of Fed rate cuts, but Trump’s trade policies could delay the easing cycle.
• BoE expected to hold rates at 4.5%, while UK labor data remains in focus for future monetary policy shifts.

The Pound Sterling dropped 0.20% against the Greenback during the North American session as traders await the Federal Reserve's monetary policy decision. Investors are also looking for an update on economic projections, which could lay the blueprint for what the Fed might do in the upcoming months. The GBP/USD trades at 1.2971 after hitting a daily high above 1.30.

Greenback strength and Fed uncertainty weigh on Sterling ahead of key policy updates

Market mood is mixed, with US equities trading in the green while European ones are not doing so well. The US economic schedule is absent, and market players are awaiting the Fed’s decision at 18:00 GMT.

Traders had priced the Fed to ease policy by 57 basis points (bps) throughout the year. Nevertheless, President Donald Trump's inflation-prone US trade policies could prevent the US Central Bank from continuing its cutting rates cycle and waiting to assess the impact on the economy.

So far, an Atlanta Fed model updated on March 18 shows that the Gross Domestic Product (GDP) is expected to contract -1.8% in QQ 2025.

Aside from this, the recovery of the Greenback halted Cable’s gains above 1.30. As of writing, the US Dollar Index (DXY), which tracks the buck’s performance versus a basket of six other currencies, posted gains of 0.40%, up at 103.65.

Across the pond, UK labor market data will be cautiously dissected by market players ahead of the Bank of England (BoE) monetary policy decision. The BoE is expected to hold rates at 4.5%, according to money market futures data.

GBP/USD Price Chart: Technical outlook

GBP/USD continued to trend up steadily, with no volatile movements so far, as traders await the Fed’s decision. On the upside, key resistance levels lie at 1.3009, the current year-to-date (YTD) peak, followed by November’s 6 high at 1.3047 and 1.31. Momentum shows that neither buyers nor sellers are in charge, as depicted by a flat Relative Strength Index (RSI) near overbought territory.

Conversely, the pair could extend its losses toward 1.2911, the March 17 swing low, ahead of the 200-day Simple Moving Average (SMA) at 1.2795.

• USD/JPY rises to near 150.00 ahead of the Fed’s monetary policy outcome at 18:00 GMT.
• Investors will pay close attention to Fed’s dot ploy as the central bank is expected to leave interest rates steady.
• The Japanese administration sees downside economic risks due to accelerating inflationary pressures and trade war.

The USD/JPY pair jumps to near the psychological level of 150.00 in North American trading hours on Wednesday. The asset strengthens as the US Dollar (USD) bounces back ahead of the Federal Reserve’s (Fed) monetary policy decision at 18:00 GMT.

The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, recovers more than 0.4% from the five-month low of 103.20.

The Fed is almost certain to keep interest rates steady in the range of 4.25%-4.50% for the second time in a row. Therefore, investors will focus majorly on the Fed’s dot plot and economic projections. Investors are mixed over whether Fed officials will guide a dovish interest rate outlook amid easing inflationary pressures or a hawkish one due to accelerating consumer inflation expectations.

The Consumer Price Index (CPI) data for February showed that the core inflation – which excludes volatile food and energy prices – rose by 3.1%, the lowest level seen since April 2021. Meanwhile, the preliminary University of Michigan (UoM) five-year Consumer Inflation Expectations for March accelerated to 3.9% from 3.5% in February.

Meanwhile, the Japanese Yen (JPY) weakens as Japan’s government has warned of downside risks to the economy due to accelerating inflationary pressures and the United States (US) President Donald Trump-led-tariff war. Japan’s Cabinet Office reported in its monthly March report, released during European trading hours on Wednesday, that Trump’s trade war and Chinese economic uncertainty could result in a decline in exports. However, officials were confident that the economy will continue recovering at a “moderate pace” with the improving “employment and income” conditions.

Earlier in the day, the Yen remained volatile as Bank of Japan (BoJ) Governor Kazuo Ueda guided that uncertainty surrounding Japan's economy, prices remain high after the central bank decided to keep interest rates steady at 0.5%, as expected.

Pound Sterling (GBP) is softer on the session, in line with its G10 peers, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

Short-term price patterns may be tilting negative

"There were no UK data reports today, leaving the pound to essentially track the general trend in the USD once again. UK pay and employment data tomorrow are, however, likely to bolster the case for only cautious easing steps from the BoE in the coming months, proving something of a cushion for the pound."

"GBP gains may be slowing. The broader bull trend looks solid but short-term price action suggests Cable has reached a minor peak at least just above 1.30. Loss of support at 1.2955 will trigger a little more weakness intraday and tilt the daily pattern of price action a little more negative potentially."
 

Spot has drifted a little lower through the overnight session after failing to progress through the mid-1.09s. Intraday volatility may have been accentuated by the sharp swings in Turkish markets earlier, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

Bull trend is consolidating and still prone to pushing higher

"Eurozone data showed a slowdown in Q4 Labour Costs (to 3.7% in the year, from 4.5%). Eurozone Feb CPI was revised a tenth lower (0.3% m/m, 2.3% y/y). Little substantive progress emerged from US/Russia talks on Ukraine yesterday—underscoring perhaps how hard it may be to get a lasting agreement." 

"The EUR has drifted a little lower after again failing to progress above the mid-1.09 point. There is some technical jeopardy for the EUR here, but only if spot losses extend below key short-term support at 1.0830 (double top trigger). Otherwise, the bull trend is consolidating and still prone to pushing higher. Minor dips are still likely to find willing buyers."

The Canadian Dollar (CAD) rebound petered out below 1.43 yesterday. A slightly firmer USD ahead of the Fed has added to the lift in funds today but investors will be reluctant to bid up the CAD too far ahead of more clarity on tariff risks facing Canada, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

USD/CAD gains may extend to the 1.4350/80 zone

"The USD still looks overvalued relative to what tariff action has been deployed—and what might yet emerge. But there is unlikely to be a significant recovery in the CAD ahead of April 2’s tariff update and even then, wide short-term, rate spreads really do need to narrow significantly to drive the CAD sustainably higher." 

"A firm rebound from yesterday’s intraday low around 1.4270 set a bullish, short-term reversal signal on the 6-hour chart (outside range higher). The rebound coincided with spot testing trend support for the USD off the September low." 

"USD/CAD gains may extend to the 1.4350/80 zone in the near term. A break above the upper 1.43s would pave the way for a return to the low/mid-1.44s. Support is 1.4250/70."

Markets are settling into ranges as investors curb risk-taking ahead of the FOMC. Stocks are trading narrowly after yesterday’s US market declines. Bonds are a little softer in Europe while Treasurys are steady. Caution has given the USD a broad— short-covering—lift versus the majors. The main market mover is Turkey where the TRY and local bonds plunged on renewed domestic political risk, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

USD firmer as markets trade cautiously into Fed decision

"There does appear to be a lot of uncertainty about what the Fed will deliver today. No change in policy is expected but rather more interest will be in how Fed Chair Powell articulates the risks around the outlook as the economy appears at risk of weakening sharply in Q1 amid uncertainty over US trade policy while core PCE remains sticky and inflation expectations have jumped as consumers fret about the impact of tariffs." 

"Swaps reflect a little more than 50bps of anticipated easing this year so what the dot plot implies in this respect will be key to how the USD reacts. It’s hard seeing the Fed sound more hawkish at this point but that might be what the USD needs to stage any sort of major turnaround. The Fed is the main event today but the late afternoon release of the January Treasury International Capital (TIC) flows data may warrant some attention." 

"Net inflows have been positive, if slowing after a sharp increase in net inflows last September, but December’s data reflected the largest ever one-month net outflow but official (i.e., central banks etc.) accounts from US assets. Earlier, the BoJ left policy unchanged, as expected. More tightening seems likely (possibly at the next policy decision), given rising wages and upside risks to the inflation outlook."

• AUD/USD corrects further to near 0.6330 as the US Dollar bounces back ahead of the Fed’s monetary policy decision and dot plot.
• The Fed is almost certain to keep interest rates steady for the second straight monetary policy meeting.
• The Australian economy is expected to have added fresh 30K workers in February.

The AUD/USD pair extends its correction to near 0.6330 in the North American session on Wednesday from the three-week high of 0.6390 posted on Monday. The Aussie pair faces selling pressure as the US Dollar (USD) rebounds ahead of the Federal Reserve’s (Fed) monetary policy decision at 18:00 GMT.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, recovers to near 103.70 after attracting bids near the five-month low of 103.20. S&P 500 futures have posted nominal gains ahead of the opening of the United States (US), indicating a slight improvement in the risk appetite of investors.

Investors expect the Fed to leave interest rates unchanged in the range of 4.25%-4.50% for the second time in a row. Fed officials have been guiding that borrowing rates should remain at their current levels until they get clarity over the policies by US President Donald Trump. Market participants expect Trump’s tariff policies will be inflationary for the economy and could lead to a recession.

Apart from the Fed’s policy decision, investors will also focus on the doty plot, which shows where officials see the Federal funds rate heading in the medium and longer term. In the December meeting, Fed officials forecasted two interest rate cuts for 2025.

Meanwhile, the Australian Dollar (AUD) will be influenced by the Aussie employment data for February, which will be released on Thursday. Investors will pay close attention to the labor market data as it will influence market expectations for the Reserve Bank of Australia’s (RBA) monetary policy outlook. The employment report is expected to show that the economy added 30K fresh workers last month, lower than 44K in January. The Unemployment Rate is expected to remain steady at 4.1%.

European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Wednesday that the timing and the size of the ECB rate cuts will depend on data. 

Villeroy further reiterated that they will be at the 2% inflation target in the coming year.

Earlier in the day, ECB Vice President Luis de Guindos said that while increasing defense spending across Europe was the "number one priority", he noted that there is a need to guarantee budget stability in accordance with the bloc's fiscal rules, per Reuters.

Market reaction

EUR/USD showed no immediate reaction to these comments and was last seen losing 0.4% on the day near 1.0900.

• The US Dollar trades in the green against most of its major peers, with a big surge against the Turkish Lira. 
• Traders assess the impact of the upcoming Federal Reserve rate decision. 
• The US Dollar Index is still stuck between 103.00 and 104.00 for now. 

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, ticks up and recovers above 103.50 at the time of writing on Wednesday as the US Dollar (USD) strengthens against most major currencies. The surge in the Greenback comes on the back of a steep pop of over 5% in the USD against the Turkish Lira (TRY) after headlines emerged that authorities detained Istanbul mayor Ekrem Imamoglu, President Tayyip Erdogan's main political rival, on charges including corruption and aiding a terrorist group. 

On the economic data front, it is a very calm day in the runup towards the Federal Reserve (Fed) decision on interest rates later in the day. The Federal Open Market Committee (FOMC) is set to announce its policy rate decision and publish the Summary of Economic Projections (SEP) update. After the meeting, Fed Chairman Jerome Powell will comment in a press conference. With the Trump policy in the backdrop, markets will want to know how many, if any, rate cuts the Fed members have penciled in for 2025 and beyond.

Daily digest market movers: Fed’s silence could be deafening 

• At 18:00 GMT, the Fed will release its Interest Rate Decision and Monetary Policy Statement, along with the Summary of Economic Projections. 
• The policy rate is expected to remain unchanged in the 4.25%-4.50% range. 
• Besides that, the Interest Rate Projections in the SEP update might suggest how many rate cuts the Fed expects for 2025 and 2026.
• At 18:30 GMT, Fed Chairman Jerome Powell will deliver a statement and take questions in a press conference. 
• Equities show signs of some risk-on sentiment, with European indices and US futures trading in the green, though less than 0.50% on average. 
• According to the CME Fedwatch Tool, the probability of interest rates being lower than current levels in May currently stands at 16.8%, compared to 21.5% on Tuesday. For June, the odds for borrowing costs being lower stand at 62.6%.
• The US 10-year yield trades around 4.28%, off its near five-month low of 4.10% printed on March 4.

US Dollar Index Technical Analysis: Not going that easy

The US Dollar Index (DXY) withstood another firm pressure on its downside support level near 103.18 on Tuesday. The fact that the support can refrain the DXY from hitting a new six-month low suggests that markets are awaiting more clarity on tariffs, the US economy, inflation and geopolitics. The DXY is at a crossroads where, once the 103.18 level gets broken, might not come back for a long time now that several banks are starting to call for more US Dollar devaluation in the coming years, according to Bloomberg. 

A return to 104.00 would mean the DXY simply stays loyal to its range for March. If bulls can avoid a technical rejection there, look for a large sprint higher towards the 105.00 round level, with the 200-day Simple Moving Average (SMA) converging at that point and reinforcing this area as a strong resistance. Once broken through that zone, a string of pivotal levels, such as 105.53 and 105.89, will present as caps. 

On the downside, the 103.00 round level could be considered a bearish target in case US yields roll off on the back of the Fed communication later this Wednesday, with even 101.90 not unthinkable if markets further capitulate on their long-term US Dollar holdings. 

US Dollar Index: Daily Chart

• USD/CAD stays above 1.4300 ahead of the Fed’s monetary policy outcome at 18:00 GMT.
• Investors will keenly focus on the Fed’s dot plot as the central bank is expected to keep interest rates steady.
• Traders are expected to reassess BoC’s dovish bets due to hot Canadian CPI data in February.

The USD/CAD pair rises to near 1.4330 in European trading hours on Wednesday. The Loonie pair gains as the US Dollar (USD) rebounds ahead of the Federal Reserve’s (Fed) monetary policy decision at 18:00 GMT. The US Dollar Index (DXY) advances 0.4% to near 103.70 after revisiting the five-month low of 103.20.

According to the CME FedWatch tool, the Fed is certain to keep interest rates unchanged in the range of 4.25%-4.50%. Therefore, investors will pay close attention to the Fed’s dot plot and economic projections. In the December policy meeting, Fed officials collectively guided two interest rate cuts for 2025.

Investors will also focus on Fed Chair Jerome Powell’s press conference after the policy decision to get cues about the impact of United States (US) Donald Trump’s policies on the economic outlook. Lately, comments from a slew of US officials, including Trump, indicated that Trump’s economic policies could lead to economic turbulence in the near term.

Meanwhile, the Canadian Dollar (CAD) is expected to face pressure from tariffs slapped by the US. Donald Trump has imposed a 25% levy on Canadian goods imported to the US but has provided some extension on those products that come under the purview of the United States-Mexico-Canada Agreement (USMCA).

On the domestic front, Canadian inflation has accelerated significantly in February, forcing traders to reassess their expectations for the Bank of Canada’s (BoC) monetary policy outlook. On Tuesday, Statistics Canada reported that the annual Consumer Price Index (CPI) rose at a faster pace of 2.6%, compared to 1.9% growth seen in January.

USD/CAD holds above the 100-period Exponential Moving Average (EMA), which is around 1.4222, suggesting that the overall trend is bullish.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a sideways trend.

Going forward, an upside move above the March 10 high of 1.4470 will open the door toward the psychological resistance of 1.4500 and the January 30 high of 1.4595.

On the contrary, a breakdown below the February 14 low of 1.4151 by the pair would expose it to the December 9 low of 1.4094, followed by the December 6 low of 1.4020.

USD/CAD daily chart

USD/CAD is holding above its 100-day moving average at 1.4247, BBH's FX analysts report.

High inflation and negative growth prospect are a drag for CAD

"Canada inflation ran hot in February. Headline inflation rose to 2.6%y/y (consensus: 2.2%) vs. 1.9% in January. Core inflation (average of trim and median CPI) quickened to 2.9% y/y (consensus: 2.75%) vs. 2.7% in January. Sales taxes were reapplied to eligible products mid-February which put upward pressure on consumer prices as taxes paid by consumers are included in the CPI."

"Headline and core CPI inflation are tracking above the Bank of Canada’s (BOC) Q1 projection of 2.1% and 2.5%, respectively. The implication is the BOC has limited room to ease policy further to offset the drag to growth from heightened trade policy uncertainty. The combination of high inflation and unfavorable growth prospect is a drag for CAD."

NZD/USD retraced some of this week’s gains on USD strength, BBH's FX analysts report.

Long-term fundamental equilibrium for NZD/USD is at 0.6700

"New Zealand’s annual current account deficit narrowed to -6.2% of GDP in Q4 from -6.5% in Q3. The current account deficit remains large by historical standards, suggesting NZD needs to keep trading at a deep discount to fundamental equilibrium to attract foreign investments and finance this deficit. We estimate long-term fundamental equilibrium for NZD/USD at around 0.6700."

US Dollar (USD) is expected to trade between 7.2200 and 7.2430 vs Chinese Yuan (CNH). In the longer run, сurrent price movements are likely part of a 7.2100/7.2800 consolidation range, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Current price movements are likely part of a consolidation range

24-HOUR VIEW: "We expected USD to 'trade between 7.2200 and 7.2430 yesterday.' USD then traded in a narrower range of 7.2215/7.2371, ending the day little changed at 7.2274 (+0.02%). The price action provides no fresh clues, and we continue to expect USD to trade between 7.2200 and 7.2430."

1-3 WEEKS VIEW: "Our most recent narrative was from last Friday (14 Mar, spot at 7.2490), wherein 'the current price movements are likely part of a 7.2100/7.2800 consolidation range.' USD traded in a relatively quiet manner over the past few days and there is no change in our view."

• USD/CHF finds ground temporarily near 0.8750 ahead of the Fed’s monetary policy decision at 18:00 GMT.
• The Fed is expected to keep interest rates steady for the second time in a row.
• The SNB could maintain an ultra-dovish policy stance amid risks of inflation remaining persistently lower.

The USD/CHF pair attracts bids near the three-month low of 0.8750 during European trading hours on Wednesday. The Swiss Franc pair gains as the US Dollar (USD) rebounds ahead of the outcome of the Federal Reserve’s (Fed) two-day monetary policy meeting at 18:00 GMT.

The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, recovers to near 103.70 from the five-month low of 103.20 posted the previous day.

Investors expect the Fed to leave interest rates unchanged in the range of 4.25%-4.50% for the second time in a row as officials need time to get clarity over United States (US) President Donald Trump’s economic policies. The Fed will also release the dot plot, which shows where policymakers see the Federal funds rate heading in the medium and long term, and the Summary of Economic Projections (SEP).

Meanwhile, the Swiss Franc (CHF) underperforms as investors expect the Swiss National Bank (SNB) to follow an ultra-dovish policy-easing approach amid deepening risks of inflation remaining persistently lower. Swiss Consumer Price Index (CPI) decelerated to 0.3% in 12 months to February.

USD/CHF is inching closer to revisiting the four-month low of 0.8736 plotted from the December 6 low. The outlook of the pair is broadly bearish as it trades below the 200-day Exponential Moving Average (EMA), which is around 0.8882.

The momentum is on the bearish side as the 14-day Relative Strength Index (RSI) oscillates in the 20.00-40.00 range.

The asset could face more downside towards the November 8 low of 0.8700 and the November 6 low of 0.8620 if it falls below the December 6 low of 0.8736.

On the flip side, a recovery move above the psychological support of 0.9000 would drive the asset towards the February 28 high of 0.9036, followed by the round-level resistance of 0.9100.

USD/CHF daily chart

The Bank of Japan (BOJ) delivered a cautious hold and warns against a weaker Japanese Yen (JPY), BBH's FX analysts report.

BOJ signals little tolerance for a weaker currency

"USD/JPY rallied briefly above 150.00 before paring back gains to 149.20. As was widely expected, the BOJ left the policy rate unchanged at 0.50%. The decision was unanimous. BOJ Governor Ueda reiterated the bank’s guidance that it would continue to raise the policy interest rate if the outlook for economic activity and prices will be realized, adding real interest rate is very low."

"However, the BOJ cautioned 'there remain high uncertainties surrounding Japan's economic activity and prices, including the evolving situation regarding trade…' The comments reinforce market pricing for a BOJ terminal rate of 1.00% to 1.25% over the next two years with the next full 25bps hike in September."

"The limited room for a further upward adjustment to BOJ rate expectations curtails JPY upside. Meanwhile, JPY downside is contained as the BOJ signaled little tolerance for a weaker currency. 'With firms' behavior shifting more toward raising wages and prices recently, exchange rate developments are, compared to the past, more likely to affect prices.' USD/JPY faces important resistance at the 200-day moving average around 152.00."

US Dollar (USD) has likely entered a 148.80/149.90 range trading phase vs Japanese Yen (JPY). In the longer run, increase in momentum indicates USD could strengthen toward 150.30, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD can strengthen toward 150.30

24-HOUR VIEW: "Following Monday’s price action, we indicated yesterday (Tuesday), when USD was at 149.30, that 'The price movements have resulted in an increase in momentum.' While we expected USD to rise, we highlighted that 'the major resistance at 150.30 is likely out of reach for now' and we noted that 'support levels are at 149.00 and 148.70.' Our view was not wrong, as USD rose to 149.93, pulled to 149.07 before closing largely unchanged at 149.26 (+0.03%). USD has likely entered a range trading phase. Today, we expect it to trade in a 148.80/149.90 range."

1-3 WEEKS VIEW: "We continue to hold the same view as yesterday (18 Mar, spot at 149.30). As highlighted, the recent increase in momentum indicates USD could strengthen toward 150.30. The upward momentum will remain intact as long as USD holds above 148.30."

• EUR/USD faces selling pressure near 1.0950 as the US Dollar strengthens ahead of the Fed’s monetary policy decision.
• The Fed is expected to keep interest rates steady in the range of 4.25%-4.50%.
• The Euro drops despite German leaders agreed on increasing the borrowing limit in the lower house of Parliament.

EUR/USD falls sharply to slightly below 1.0900 in Wednesday’s European session after posting a fresh five-month high near 1.0955 the previous day. The major currency pair weakens as the US Dollar (USD) performs strongly ahead of the Federal Reserve’s (Fed) interest rate decision at 18:00 GMT. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to near 103.70 after revisiting a five-month low around 103.20 on Tuesday.

According to the CME FedWatch tool, the Fed is almost certain to keep borrowing rates steady in the range of 4.25%-4.50%. This would be the second straight policy meeting in which the Fed will leave interest rates unchanged. 

Traders have remained increasingly confident about the Fed maintaining a status quo on Wednesday as officials have been arguing in favor of maintaining a “wait and see” approach until they get clarity over the United States (US) economic outlook under the leadership of President Donald Trump.

Market participants expect that Donald Trump’s tariff policies could result in a resurgence in inflationary pressures in the near term as the impact of higher import duties will be borne by US importers who will pass on the impact to consumers.

Apart from the interest rate decision, investors will also focus on the Fed’s dot plot, which shows policymakers’ collective forecast for the interest rate outlook in the medium and longer term. In the December meeting, Fed officials projected two interest rate cuts in 2025.

Daily digest market movers: EUR/USD drops as Euro underperforms

• A sharp decline in the EUR/USD pair from the five-month high is also driven by the Euro’s (EUR) underperformance across the board on Wednesday. The Euro drops even though German leaders approved likely Chancellor Frederich Merz’s debt restructuring plan on Tuesday at Bundestag lower house Parliament, aiming to stimulate economic growth and boost defense spending.
• Market participants expect that an end to German fiscal conservatism after over a decade will be inflationary and pro-growth for the economy. Such a scenario will force the European Central Bank (ECB) to turn cautious about the current monetary expansion cycle. The ECB has reduced interest rates six times since June 2024.
• Also, investors expect that US President Trump’s tariff agenda could accelerate price pressures in the Eurozone. On Tuesday, US Treasury Secretary Scott Bessent confirmed in an interview with Fox Business that each country will receive a number on “April 2” that we believe represents their “tariffs”.
• On the geopolitical front, US President Trump and Russian leader Vladimir Putin agreed to seek an inmediate 30-day ceasefire between Russia and Ukraine on energy and infrastructure targets.
• "We agreed to an immediate Ceasefire on all Energy and Infrastructure, with an understanding that we will be working quickly to have a Complete Ceasefire and, ultimately, an END to this very horrible War between Russia and Ukraine," Trump said in a post on Truth Social on Tuesday. 

Technical Analysis: EUR/USD struggles around 1.0950

EUR/USD struggles to extend its upside above 1.0950. However, the long-term outlook of the major currency pair remains firm as it holds above the 200-day Exponential Moving Average (EMA), which trades around 1.0660.

The pair strengthened after a decisive breakout above the December 6 high of 1.0630 on March 5. 

The 14-day Relative Strength Index (RSI) wobbles near 70.00, suggesting that a strong bullish momentum is intact.

Looking down, the December 6 high of 1.0630 will act as the major support zone for the pair. Conversely, the psychological level of 1.1000 will be the key barrier for the Euro bulls.

• The Federal Reserve is expected to leave the policy rate unchanged for the second consecutive meeting.
• The revised Summary of Economic Projections could offer key clues about the policy outlook.
• The US Dollar could recover if the Fed downplays growth concerns.  

The United States (US) Federal Reserve (Fed) will announce monetary policy decisions and publish the revised Summary of Economic Projections (SEP), the so-called dot plot, following the March policy meeting on Wednesday. Market participants widely anticipate the US central bank to leave policy settings unchanged for the second consecutive meeting, after cutting the interest rate by 25 basis points (bps) to the 4.25%-4.5% range in December.

The CME FedWatch Tool shows that investors virtually see no chance of a rate cut in March while pricing in about a 30% probability of a 25 bps reduction in May. Hence, revised forecasts and comments from Fed Chairman Jerome Powell could drive the US Dollar’s (USD) valuation rather than the interest rate decision itself. 

In December, the dot plot showed that policymakers were projecting a total of 50 bps reduction in the policy rate in 2025, while forecasting an annual Gross Domestic Product (GDP) growth of 2.1% and seeing an annual Personal Consumption Expenditures (PCE) inflation of 2.5% at year-end. 

“The FOMC is broadly expected to keep its police stance unchanged for a second consecutive meeting,” said TD Securities analysts previewing the Fed event. “Based on the still steady signal provided by the labor market amid still sticky inflation, we expect Chair Powell to double-down on his message of patience regarding policy decisions. We also do not anticipate significant changes to the Fed's SEP or to QT plans for now,” they added.

When will the Fed announce its interest rate decision and how could it affect EUR/USD?

The US Federal Reserve is scheduled to announce its interest rate decision and publish the monetary policy statement with the revised SEP on Wednesday at 18:00 GMT. This will be followed by Fed Chairman Jerome Powell's press conference starting at 18:30 GMT. 

Disappointing macroeconomic data releases from the US, combined with US President Donald Trump’s tariff announcements, revived fears over the US economy tipping into recession. According to the Federal Reserve Bank of Atlanta’s GDPNow model, the US economy is projected to contract at an annual rate of 2.4% in the first quarter.   

In case the dot plot shows a rate cut projection of 75 bps in 2025, this could be seen as a dovish shift in the rate outlook and trigger another leg of the USD selloff. On the flip side, a hawkish revision in the SEP, with officials forecasting a single 25 bps cut, could boost the currency.

If the interest rate projection remains unchanged, investors will scrutinize inflation and growth forecasts. A downward revision to growth expectations could hurt the USD, while an upward revision to inflation forecasts, without a noticeable change in the GDP estimates, could support the USD in the near term.

Powell’s comments could also impact the USD’s performance. If he downplays concerns over an economic downturn and puts more emphasis on the uncertainty surrounding the inflation outlook, citing Trump’s administration’s tariffs, the USD is likely to outperform its rivals in the near term. On the contrary, if Powell acknowledges signs of a worsening growth outlook, the USD is likely to have a difficult time finding demand.

Eren Sengezer, European Session Lead Analyst at FXStreet, provides a short-term technical outlook for EUR/USD:

“EUR/USD remains technically bullish in the near term as it stays in the upper half of the two-month-old ascending regression channel. Additionally, the Relative Strength Index (RSI) indicator on the daily chart holds near 70, reaffirming the bullish stance.”

“On the upside, 1.1000 (upper limit of the ascending channel, round level) aligns as a key resistance level before 1.1100 (static level, round level) and 1.1180 (static level from October 2024). Looking south, the first support level could be spotted at 1.0770 (mid-point of the ascending channel) before 1.0720, where the 200-day Simple Moving Average (SMA) is located. A daily close below the latter support could attract technical sellers and open the door for an extended slide toward 1.0645 (20-day SMA).”

Silver prices (XAG/USD) fell on Wednesday, according to FXStreet data. Silver trades at $33.71 per troy ounce, down 0.87% from the $34.01 it cost on Tuesday.

Silver prices have increased by 16.68% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 89.75 on Wednesday, up from 89.23 on Tuesday.

(An automation tool was used in creating this post.)

• Gold advances to a fresh all-time high at $3,045 on Wednesday. 
• Traders sent Gold higher on top of geopolitical news from Turkey and Ukraine. 
• Gold’s rally starts to look a bit overdone and might see a pullback soon. 

Gold’s price (XAU/USD) corrects slightly lower to near $3,030 at the time of writing on Wednesday after stretching higher and hitting a new all-time high at $3,045 earlier in the day. The positive move came after headlines emerged that authorities detained Istanbul mayor Ekrem Imamoglu, President Tayyip Erdogan's main political rival, on charges including corruption and aiding a terrorist group. 

This headline adds to the geopolitical drivers in Gold after Tuesday’s phone call between United States (US) President Donald Trump and Russian President Vladimir Putin, which did not lead to a ceasefire deal or a major breakthrough. President Trump and President Putin agreed to an immediate pause in strikes against energy infrastructure in the Ukraine war. However, Ukrainian President Volodymyr Zelenskyy said late Tuesday that talks about Ukraine without Ukraine will not bring about results.

Nevertheless, traders in the precious metal might face some headwinds later this Wednesday as the Federal Open Market Committee (FOMC) is set to announce its policy rate decision and publish the Summary of Economic Projections update. After the meeting, Federal Reserve (Fed) Chairman Jerome Powell will comment in a press conference. With the Trump policy in the backdrop, markets will want to know how many, if any, rate cuts the Fed members have penciled in for 2025 and beyond. 

Daily digest market movers: All eyes on the Fed

• Despite almost euphoric comments from US President Trump and Russian President Putin, several analysts see the recent ‘slim’ ceasefire deal as a small victory, not a step forward to peace. Putin and Trump agreed that there will be no attacks on energy objects for 30 days, Bloomberg reports. 
• According to the CME Fedwatch tool, the odds that the Fed will keep interest rates at the current range of 4.25-4.50% on Wednesday are 99%. Meanwhile, rate cut odds for June’s meeting are 64.8%. 
• Traders are paring back their bets on further monetary policy easing this year, which would weigh on the precious metal as higher yields are bearish for Gold. On the other hand, there are still concerns about a US slowdown as President Donald Trump’s tariff agenda weighs on consumer sentiment. Investors have been slashing holdings of US equities by the most on record, according to Bank of America's latest survey, underscoring a massive rotation underway in markets, Bloomberg reports. 

Technical Analysis: It could get nasty

Gold ekes out another fresh all-time high in early Wednesday ahead of the Fed’s interest rate decision. The tail risk in the event is if the Fed’s dot plot (a chart where every voting FOMC member pencils in where they see the monetary policy rate for 2025 and beyond) pencils in fewer rate cuts than markets anticipate. That would boost the fear of a recession or stagflation in the US, with rates remaining elevated to fight the surging inflation caused by a trade war amid tariffs, and would be negative for Gold. 

Regarding technical levels, the new all-time high at $3,045 is the first level to beat. Next for this Wednesday is the R1 resistance at $3,048, just below the $3,050 round number. Once through there, the R2 resistance comes in at $3,063. 

On the downside, the intraday Pivot Point at $3,024 is the first line of defense, followed by the S1 support near $3,010 ahead of the $3,000 level. In case the $3,000 mark snaps, look for $2,985 as big support. 

XAU/USD: Daily Chart

EUR/USD is down near 1.0900, reflecting the broad bounce in USD, BBH FX analysts report.  

Eurozone disinflationary process remains well on track

"The Eurozone Q4 labor costs print is today’s domestic focus. The ECB projects labor costs growth to slow to 4.1% y/y in Q4 vs. 4.6% in Q3 and drift down to its historical average of 1.7% by 2027."

"The Eurozone disinflationary process remains well on track. Markets price-in about 50% odds of a 25bps ECB cut to 2.25% at the April 17 meeting and a total of 50bps of easing over the next 12 months. Looser fiscal policy in Germany and the EU’s military build-up plan lessens the need for the ECB to slash rates more than is currently priced-in which is EUR supportive."

USD/JPY has embarked on a rebound after forming a trough at 146.50 recently, Société Générale's FX analysts note. 

Below 148.30, the phase of decline can resume

"It is inching towards the descending trend line drawn since January. Recent pivot high of 151.30/152.00, which is also the 200-DMA is a potential hurdle. Cross above this will be crucial to confirm a larger up move. If the pair fails to defend the low achieved earlier this week at 148.30, the phase of decline could resume."

Platinum Group Metals (PGMs) trade with a negative tone at the beginning of Wednesday, according to FXStreet data. Palladium (XPD) changes hands at $959.87 a troy ounce, with the XPD/USD pair easing from its previous close at $969.00.

In the meantime, Platinum (XPT) trades at $988.51 against the United States Dollar (USD) early in the European session, also under pressure after the XPT/USD pair settled at $1003.45 at the previous close.

Platinum Group Metals (PGMs) prices mentioned above are based on the FXStreet data feed for Contracts for Differences (CFDs).

(An automation tool was used in creating this post.)

• Silver price pulled back from a five-month high of $34.23, reached on Tuesday.
• Silver bulls take a breather ahead of the Federal Reserve’s interest rate decision due on Wednesday.
• The strengthening US Dollar continues to create headwinds for the dollar-denominated precious metal.

Silver price (XAG/USD) retreated after reaching a five-month high of $34.23 on Tuesday, trading around $33.70 per troy ounce during European hours on Wednesday. The decline comes as Silver bulls take a breather ahead of the Federal Reserve’s (Fed) interest rate decision later in the day.

Traders will likely monitor the Fed’s updated economic projections for insights into the future trajectory of US interest rates. Higher interest rates tend to weigh on demand for non-interest-bearing assets like Silver, limiting its upside potential.

Any hawkish signals from Fed policymakers could strengthen the US Dollar (USD), making dollar-denominated Silver more expensive for buyers using foreign currencies. This could create additional headwinds for the precious grey metal.

However, downside risks for Silver price appear limited due to increased safe-haven demand driven by escalating geopolitical tensions. US President Donald Trump reaffirmed his administration's commitment to military action against Yemen’s Houthis and warned that Iran would be held accountable for any further disruptions to Red Sea shipping. Meanwhile, Israeli airstrikes in Gaza, which ended a week-long ceasefire, resulted in at least 200 casualties, according to Palestinian health authorities, as reported by Reuters.

That said, geopolitical tensions have slightly eased after President Trump and Russian President Vladimir Putin agreed on Tuesday to an immediate pause in strikes on energy infrastructure amid the Ukraine war. However, Putin declined to support a broader, month-long ceasefire negotiated by Trump’s team with Ukrainian officials in Saudi Arabia.

New Zealand Dollar (NZD) is likely to trade in a range between 0.5790 and 0.5840. In the longer run, rapid buildup in momentum continues to suggest NZD strength; the level to watch is 0.5870, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.  

The level to watch is 0.5870

24-HOUR VIEW: "On Monday, NZD surged to a high of 0.5826. Yesterday (Tuesday), when NZD was at 0.5820, we indicated that 'While further NZD strength is not ruled out, any advance is likely part of a higher 0.5785/0.5845 range. In other words, NZD is unlikely to break clearly above 0.5845 today.' NZD then traded in a narrower range than expected (0.5798/0.5831), closing marginally lower by 0.02% at 0.5821. We continue to expect range trading today, probably between 0.5790 and 0.5840." 

1-3 WEEKS VIEW: "There is not much to add to our update from yesterday (18 Mar, spot at 0.5820). As highlighted, the recent 'rapid buildup in momentum continues to suggest NZD strength, and the level to watch on the upside is 0.5870.' We will continue to hold the same view as long as the ‘strong support’ at 0.5755 (level was at 0.5740 yesterday) is intact."

EUR/USD consolidated above the 1.09 mark after the German Bundestag approved the large fiscal package with a 2/3 majority, Danske Bank's FX analyst Jens Nærvig Pedersen reports. 

Risks still skewed to the upside

"This was largely expected by markets and the reaction in EUR/USD was muted. The package must now also pass the Bundesrat, which is the upper chamber of the parliament, in a vote on Friday. Here the bill is also expected to pass. "

"Today, focus turns to the FOMC meeting where we do not anticipate strong market reactions. We do not expect Powell to guide explicitly towards a cut in May, but we do still anticipate three 25bp reductions later in the year starting from June. 

"We expect EUR/USD to consolidate around current levels in the near term, with risks still skewed to the upside. The key risk to further EUR/USD upside is that if upcoming data fails to validate market concerns about the US economy, the USD could rebound quickly."

Australian Dollar (AUD) is likely to consolidate between 0.6340 and 0.6385. In the longer run, chance for AUD to break above 0.6410; a break of this significant resistance level could potentially trigger a rapid rise, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

A clear break above 0.6410 can potentially trigger a rise

24-HOUR VIEW: "We expected AUD to 'test 0.6410' yesterday, but we pointed out that 'due to the deeply overbought conditions, it is unclear whether AUD can break clearly above this level.' Our expectation did not turn out, as AUD dropped from 0.6391 to 0.6344 before closing at 0.6361 (- 0.38%). The price action is likely part of a consolidation phase. Today, we expect AUD to trade between 0.6340 and 0.6385." 

1-3 WEEKS VIEW: "Yesterday (18 Mar, spot at 0.6385), we revised our outlook to positive, indicating that 'there is a chance for AUD to break above 0.6410.' We also indicated the following: 'The chance of AUD breaking above 0.6410 will remain intact as long as the ‘strong support’ level, currently at 0.6320, is not breached. Note that 0.6410 is a significant resistance, and a clear break above this level could potentially trigger a sharp and rapid rise.' Our update remains valid."

• NZD/USD attracts some sellers amid a modest USD bounce from a multi-month low.
• Fed rate cut bets should cap any meaningful USD gains and lend support to the pair.
• Traders might also opt to wait for the outcome of a two-day FOMC policy meeting.

The NZD/USD pair meets with some supply on Wednesday and moves away from the year-to-date (YTD) top, around the 0.5830 region touched the previous day. The selling bias picks up pace during the early European session and drags spot prices below the 0.5800 mark in the last hour.

The US Dollar (USD) gains some positive traction and for now, seems to have snapped a three-day losing streak to a five-month low, which, in turn, is seen as a key factor exerting downward pressure on the NZD/USD pair. The intraday USD uptick could be attributed to some repositioning trade ahead of the key central bank event risk – the outcome of a two-day FOMC meeting. Adding to this, the risk of a further escalation of geopolitical tensions in the Middle East further benefits the safe-haven buck and contributes to driving flows away from the perceived riskier Kiwi.

Any meaningful USD appreciation, however, seems elusive in the wake of the growing acceptance that the Fed would lower borrowing costs several times this year amid concerns over a tariff-driven US economic slowdown. Hence, the market focus will remain glued to the Fed's updated economic projections, which include the so-called do pot. Apart from this, Fed Chair Jerome Powell's remarks would be scrutinized for cues about the future rate-cut path, which, in turn, will influence the USD price dynamics and help in determining the near-term trajectory for the NZD/USD pair. 

Hence, it will be prudent to wait for strong follow-through selling before confirming that the currency pair's recent move-up witnessed over the past two weeks or so has run its course and positioning for deeper losses. Even from a technical perspective, this week's sustained breakout above the 0.5760 strong horizontal barrier favors bullish traders and supports prospects for the emergence of some dip-buying. This, in turn, should help limit the downside for the NZD/USD pair. 

GBP/USD broke the key 1.300 resistance yesterday on the back of USD weakness, ING's FX analyst Francesco Pesole notes.

EUR/GBP remains close to its January 2025 high of 0.846

"In the crosses, the GBP is not showing particular strength, and EUR/GBP remains close to its January 2025 high of 0.846."

"We don’t expect tomorrow’s Bank of England meeting to be a major event for sterling. As discussed here, we expect a consensus hold with only two members voting for a cut."

"The UK budget event later this month is the biggest risk event for the pound. GBP negative scenarios are predominant as Chancellor Rachel Reeves may either slash spending, raise taxes or risk unnerving the gilt market. We see upside risks to 0.85 in EUR/GBP near term."

Pound Sterling (GBP) is expected to rachet higher in an uneven manner between 1.2955 and 1.3030. In the longer run, further rise in GBP seems likely; modest increase in momentum suggests 1.3050 may not come into view so soon, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Further rise in GBP seems likely

24-HOUR VIEW: "GBP rose and tested the 1.3000 level two days ago. Yesterday, we highlighted the following: 'While the rapid rise appears overstretched, as long as 1.2955 (minor support is at 1.2970) is not breached, there is a chance for GBP to break above 1.3000. Given the overbought conditions, it might not be able to maintain a foothold above this level. The next resistance at 1.3050 is unlikely to come under threat.' GBP subsequently rose to 1.3005, pulled back sharply to 1.2953 and then rose back up to 1.3010. GBP closed at 1.3003, slightly higher by 0.10%. While the outlook for today is mixed after the sharp swings. That said, having breached 1.3000, the underlying tone seems firm. Today, we expect GBP to ratchet higher in an uneven manner between 1.2955 and 1.3030." 

1-3 WEEKS VIEW: "Tracking the strong rise in GBP since early this month, in our most recent narrative from last Thursday (13 Mar, spot at 1.2955), we indicated that 'to continue to rise, GBP must break and remain above 1.3000.' Yesterday (18 Mar), GBP rose to 1.3010, closing marginally above 1.3000 (1.3003, +0.10%). While further rise in GBP seems likely, the modest increase in momentum suggests the next resistance at 1.3050 may not come into view so soon. Overall, only a breach of 1.2930 (no change in ‘strong support’ level from yesterday) would mean that GBP is not rising further."

The US Dollar (USD) enters FOMC day with a good deal of bearish momentum. Despite Treasury Secretary Scott Bessent’s attempts to quell recessionary fears, high-frequency indicators have kept pointing down and still favour a rotation away from US assets. The latest Fund Manager Survey from Bank of America showed a record gyration from US to European equities and 69% of respondents believed US exceptionalism is over. One positive takeaway for the dollar is the radical increase in pessimistic views on global growth too, ING's FX analyst Francesco Pesole notes.

DXY rebounds may be capped around 104.0

"For the near term, the best chance at a rebound for the greenback is probably today’s FOMC announcement. The chances of a cut are none, but the recent repricing in the USD curve suggests some dovish tweaks to forward guidance are expected by the market. We are not convinced. The Fed has an inflation and employment mandate, and neither of those has declined enough to warrant a dovish shift." 

"Growing pessimism on growth and consumption still needs to face the hard data test, and if the US administration can stomach the equity correction, the Fed probably can too. Things should change in the coming months as the US slowdown (but not a recession, in our view) unfolds, and we expect two cuts in 2H25. However, the FOMC median dot plot may not be revised lower today, so still signals only one cut in 2025."

"Markets will be sensitive to growth and inflation forecasts too, but if we are right with our dot plot call and Fed Chair Jay Powell retains a cautious tone on easing, the dollar should be able to rebound. Still, to have a sustained USD recovery, US macro sentiment must start to stabilise. Until that happens, DXY rebounds may be capped around 104.0."

• USD/TRY pulled back from its record high of 41.70, reached during early European trading on Wednesday.
• Political risks in Turkey intensified as Istanbul Mayor Ekrem Imamoglu was detained this morning. 
• President Trump dismissed two Democratic Federal Trade Commission (FTC) commissioners.

USD/TRY retreats from its record high of 41.70, reached during early European trading hours on Wednesday, hovering around 38.70 at the time of writing. The pair surged as the Turkish Lira weakened sharply amid escalating political risks in Turkey.

State broadcaster TRT, citing the Istanbul Prosecutor’s Office, reported that Istanbul Mayor Ekrem Imamoglu, President Recep Tayyip Erdogan’s main political rival, was detained this morning as part of corruption and terror investigations.

Additionally, the state-run Anadolu Agency stated that detention orders were issued for approximately 100 others linked to Imamoglu, including his press adviser Murat Ongun, who was expected to be the Republican People’s Party (CHP) presidential candidate. This move is widely seen as Erdogan consolidating his power by sidelining potential challengers, causing turbulence in Turkish financial markets.

Meanwhile, the USD/TRY pair also gains support from a strengthening US Dollar (USD), backed by stable Treasury yields as investors await the Federal Reserve’s (Fed) interest rate decision later in the day. The Fed is expected to keep rates steady amid persistent inflation concerns and economic uncertainty. Traders are watching the Fed’s updated economic projections for clues on future US interest rate policy. Any hawkish signals could further bolster the USD against its peers.

Additionally, the Wall Street Journal reports that US President Donald Trump has dismissed two Democratic Federal Trade Commission (FTC) commissioners. However, questions remain over his authority to do so, sparking speculation about whether this move sets a precedent for potential dismissals of Federal Reserve (Fed) Chair Jerome Powell and other Federal Reserve members.

West Texas Intermediate (WTI) Oil price falls on Wednesday, early in the European session. WTI trades at $66.53 per barrel, down from Tuesday’s close at $66.55. Brent Oil Exchange Rate (Brent crude) is also shedding ground, trading at $70.03 after its previous daily close at $70.07.

Disclaimer: West Texas Intermediate (WTI) and Brent oil prices mentioned above are based on FXStreet data feed for Contracts for Differences (CFDs).

(An automation tool was used in creating this post.)

Euro (EUR) could trade in a choppy manner between 1.0905 and 1.0970 vs US Dollar (USD). In the longer run, EUR must break and close above 1.0950 before resuming its rally, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Chance for EUR to break clearly above 1.0950

24-HOUR VIEW: "Following the rise in EUR to 1.0929 two days, we indicated the following yesterday: 'Despite the relatively strong advance, upward momentum has not increased significantly. That said, there is no sign of an imminent pullback just yet. Today, EUR could test last week’s high, near 1.0950. Currently, it does not appear to possess enough momentum to break clearly above this level. The next major resistance at 1.1000 is unlikely to come under threat. Support is at 1.0905; a breach of 1.0885 would suggest the current upward pressure has eased.' In the London session, EUR rose to 1.0954, pulling back quickly to 1.0891. It then rebounded to close slightly higher at 1.0940 (+0.20%). The choppy price action has resulted in a mixed outlook. Today, EUR could continue to trade in a choppy manner, but the firmed underlying tone suggests a higher range of 1.0905/1.0970." 

1-3 WEEKS VIEW: "Yesterday (18 Mar, spot at 1.0920), we highlighted that the recent increase in short-term momentum 'is not sufficient to indicate that EUR is ready to resume its rally.' We added, “For that to happen, EUR 'must break and close above 1.0950.' EUR then rose to 1.0954 before closing at 1.0943 (+0.20%). The slight increase in momentum is still not enough to indicate a sustained rise. However, there is still a chance for EUR to break clearly above 1.0950 as long as it holds above 1.0855 (no change in ‘strong support’ level)."

As widely expected, the German Bundestag approved the debt break constitutional change yesterday. There are few doubts that fiscal reform will also make it through the Upper House (Bundesrat) and ultimately be signed into law. The euro has fully priced in the success of the spending reform and appears close to peak market optimism on the fiscal boost, ING's FX analyst Francesco Pesole notes.

EUR/USD to inch back below 1.090

"We must consider that Germany still doesn’t have a government, and coalition talks may prove tricky. Incidentally, while the debt break reform unlocks long-term fiscal spending opportunities, structural woes (competitiveness, innovation) are still to be addressed. Our view remains that the second quarter will bring a reality check for European optimism. With US tariffs likely to hit from the start of April, euro bullish momentum may well fade."

"The other key theme for the euro remains the direction of Ukraine-Russia peace talks. Yesterday, Russian President Putin agreed to reduce the number of attacks on Ukraine in a phone call with Trump. However, Putin is still requiring a complete halt to US armaments to Ukraine, and refusing to agree to a 30-day truce for now. Also on this topic, the euro is pricing in a good deal of optimism." 

"Should we see a truce finally being agreed, the extra support to the euro may not be substantial and probably quite conditional on the agreed terms. As we are bullish on the dollar ahead of today’s FOMC risk event, we renew our call for EUR/USD to fail a break above 1.100 and instead inch back below 1.090."

As widely expected, the German Bundestag approved the debt break constitutional change yesterday. There are few doubts that fiscal reform will also make it through the Upper House (Bundesrat) and ultimately be signed into law. The euro has fully priced in the success of the spending reform and appears close to peak market optimism on the fiscal boost, ING's FX analyst Francesco Pesole notes.

EUR/USD to inch back below 1.090

"We must consider that Germany still doesn’t have a government, and coalition talks may prove tricky. Incidentally, while the debt break reform unlocks long-term fiscal spending opportunities, structural woes (competitiveness, innovation) are still to be addressed. Our view remains that the second quarter will bring a reality check for European optimism. With US tariffs likely to hit from the start of April, euro bullish momentum may well fade."

"The other key theme for the euro remains the direction of Ukraine-Russia peace talks. Yesterday, Russian President Putin agreed to reduce the number of attacks on Ukraine in a phone call with Trump. However, Putin is still requiring a complete halt to US armaments to Ukraine, and refusing to agree to a 30-day truce for now. Also on this topic, the euro is pricing in a good deal of optimism." 

"Should we see a truce finally being agreed, the extra support to the euro may not be substantial and probably quite conditional on the agreed terms. As we are bullish on the dollar ahead of today’s FOMC risk event, we renew our call for EUR/USD to fail a break above 1.100 and instead inch back below 1.090."

• EUR/JPY may face key resistance at the upper boundary of the ascending channel near 164.50. 
• The 14-day Relative Strength Index stays above 50, strengthening the bullish outlook. 
• Initial support is seen at the nine-day EMA around 161.57.

EUR/JPY pauses its three-day winning streak, hovering around 162.60 during early European trading on Wednesday. Technical analysis of the daily chart suggested that the currency cross is trending higher within an ascending channel, indicating a continued bullish bias.

Additionally, the 14-day Relative Strength Index (RSI) remains above 50, reinforcing the bullish outlook for the EUR/JPY cross. Furthermore, the currency cross's position above the nine- and 50-day Exponential Moving Averages (EMAs) underscores strong short- and medium-term price momentum, supporting the potential for further gains.

On the upside, the EUR/JPY cross may encounter its first key resistance at the upper boundary of the ascending channel near 164.50, followed by the four-month high of 164.90, recorded on December 30. A decisive break above this critical zone could strengthen the bullish bias, paving the way for a potential test of the eight-month high at 166.69.

The EUR/JPY cross may find initial support at the nine-day EMA of 161.57. A break below this level could weaken short-term price momentum, leading the currency cross toward the 50-day EMA at 160.13, followed by the lower boundary of the ascending channel at 159.30.

A further decline below this critical support zone could erode medium-term momentum, increasing downward pressure on the currency cross. This could push the EUR/JPY cross toward its monthly low of 155.59, recorded on March 4, and potentially to 154.41, the lowest level last seen in December 2023.

EUR/JPY: Daily Chart

• The Pound Sterling struggles around 1.3000 against the US Dollar ahead of the Fed’s monetary policy decision, dot plot, and economic projections.
• Investors expect the Fed and BoE to keep interest rates steady this week.
• Market sentiment remains cautious as US President Trump is poised to impose reciprocal tariffs on April 2.

The Pound Sterling (GBP) struggles to extend the rally above the key level of 1.3000 against the US Dollar (USD) in European trading hours on Wednesday. The GBP/USD pair trades cautiously ahead of the Federal Reserve’s (Fed) monetary policy decision at 18:00 GMT.

According to the CME FedWatch tool, the Fed is certain to keep interest rates unchanged in the range of 4.25%-4.50% for the second time in a row. Therefore, the major catalyst for the US Dollar will be the Fed’s dot plot, which shows where policymakers see the Federal funds rate heading in the medium and longer term, and the Federal Open Market Committee’s (FOMC) Summary of Economic Projections (SEP).

It would be interesting to know whether Fed officials will see easing inflationary pressures and declining consumer confidence in the current scenario or accelerating consumer inflation expectations due to United States (US) President Donald Trump’s economic policies while forecasting the monetary policy outlook. In February, the annual core Consumer Price Index (CPI) – which excludes volatile food and energy prices – rose by 3.1%, the lowest level seen since April 2021.

According to analysts at Fitch, tariff shocks are estimated to “accelerate inflationary pressures by one point percent” in the near term. This scenario will discourage Fed officials from cutting interest rates before the last quarter of the year. Meanwhile, the CME FedWatch tool shows that the Fed will cut interest rates in the June meeting.

Daily digest market movers: Pound Sterling turns cautious ahead of UK employment, BoE policy

• The Pound Sterling trades with caution against its peers ahead of the United Kingdom (UK) labor market data for the three months ending January and the Bank of England’s (BoE) monetary policy decision, scheduled for Thursday. Investors will pay close attention to the Average Earnings data, a key measure of wage growth that has contributed significantly to the high inflation in the services sector.
• UK’s leading global provider of people data, analytics, and insight firm Brightmine showed on Tuesday that the pay growth has slowed as business owners are cautious before the implementation of an increase in payroll taxes from April. UK Chancellor of the Exchequer Rachel Reeves announced an increase in employers’ contribution to National Insurance (NI) from 13.8% to 15% in the Autumn Budget. 
• Brightmine also said that a significant number of firms have planned a hiring freeze or team restructuring in response to the government’s decision to increase employers’ social security contributions, with some considering pay freezes and delays to increases, Reuters report. Meanwhile, economists expect Average Earnings (Excluding and Including) bonuses to have grown almost steadily by 5.9%.
• The BoE is expected to keep interest rates steady at 4.5%, with a 7-2 vote split. BoE Monetary Policy Committee (MPC) members Catherine Mann and Swati Dhingra are expected to support an interest rate cut, while the other seven policymakers will vote to keep rates unchanged. Investors will pay close attention to BoE Governor Andrew Bailey’s commentary on the UK economic outlook amidst US President Trump’s tariff policies.
• On Tuesday, US Treasury Secretary Scott Bessent confirmed in an interview with Fox Business that reciprocal tariffs would become effective on April 2. Bessent added that he is optimistic some of the tariffs may not have to go on because a deal can be “pre-negotiated” or that once countries receive their “reciprocal tariff number”, they will come to us and want to “negotiate it down”.

Technical Analysis: Pound Sterling sees upside above 1.3000

The Pound Sterling looks for a fresh trigger to extend its two-month rally above the key level of 1.3000 against the US Dollar on Wednesday. GBP/USD bulls take a breather as the 14-day Relative Strength Index (RSI) reached overbought levels above 70.00. However, this doesn’t reflect that the bullish trend is over. The upside trend could resume once the momentum oscillator cools down to near 60.00.

Advancing 20-day and 50-day Exponential Moving Averages (EMAs) near 1.2830 and 1.2690, respectively, suggest that the overall trend is bullish.

Looking down, the 50% Fibo retracement at 1.2770 and the 38.2% Fibo retracement at 1.2614 will act as key support zones for the pair. On the upside, the October 15 high of 1.3100 will act as a key resistance zone.

• The US Dollar Index recovers some lost ground to near 103.50 in Wednesday’s early European session, adding 0.21% on the day. 
• The negative outlook of the index remains intact below the 100-day EMA with a bearish RSI indicator. 
• The initial downside target to watch is 103.20; the first upside barrier is seen at 104.10. 

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, attracts some buyers to around 103.50 during the early European session on Wednesday. Traders brace for the Federal Reserve (Fed) interest rate decision later on Wednesday, with no change in rate expected.

The new economic projections from Fed officials will be closely watched as they might offer some hints about how policymakers view the likely impact of US President Donald Trump administration policies.

Technically, the bearish outlook of the DXY remains in place, characterized by the index holding below the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The path of least resistance is to the downside as the 14-day Relative Strength Index (RSI), which stands below the midline near 31.15, supporting the sellers in the near term. 

In the bearish event, the low of March 18 at 103.20 acts as an initial support level for the USD index. The crucial contention level to watch is 102.00, representing the psychological level and the lower limit of the Bollinger Band. Extended losses could see a drop to 100.53, the low of August 28, 2024. 

On the bright side, the immediate resistance level for the DXY emerges at 104.10, the high of March 14. Further north, the next hurdle is seen at 105.45, the high of November 6, 2024. Any follow-through buying above this level could see a rally to 106.10, the 100-day EMA.

US Dollar Index (DXY) daily chart

Here is what you need to know on Wednesday, March 19:

Investors opt to remain on the sidelines while waiting for the Federal Reserve (Fed) to announce monetary policy decisions following the March meeting. The US central bank will also publish the revised Summary of Economic Projections (SEP), the so-called dot plot. 

The US Dollar (USD) failed to benefit from the risk-averse market atmosphere on Tuesday, and the USD Index closed the third consecutive day in negative territory. Early Wednesday, the index moves sideways, slightly below 103.50. Meanwhile, US stock index futures trade marginally higher after Wall Street's main indexes suffered large losses on Tuesday. The Fed is widely expected to leave the interest rate unchanged at 4.25%-4.5%. Market participants will scrutinize the revised inflation and growth projections, and pay close attention to comments from Chairman Jerome Powell in the post-meeting press conference starting at 18:30 GMT.

During the Asian trading hours on Wednesday, the Bank of Japan (BoJ) announced that it maintained the short-term interest rate in the range of 0.40%- 0.50% after concluding its two-day monetary policy review meeting, as anticipated. BoJ Governor Kazua Ueda said that they will keep adjusting the degree of monetary easing and added that the underlying inflation is still below 2%. USD/JPY gains traction in the European morning and trades at a fresh two-week high near 150.00.

Gold benefited from escalating geopolitical tensions and gained more than 1% on Tuesday. XAU/USD continues to stretch higher early Wednesday and was last seen trading at a fresh record-high above $3,040.

EUR/USD posted daily gains on Tuesday and touched its highest level since early October above 1.0950. The pair stays in a consolidation phase but manages to hold comfortably above 1.0900 in the European morning. Later in the session, Eurostat will release revisions to February inflation data. Several European Central Bank (ECB) policymakers are scheduled to deliver speeches as well.

GBP/USD corrects lower and trades below 1.3000 after closing marginally higher on Tuesday. The Bank of England will announce monetary policy decisions on Thursday. 

Bank of Japan (BoJ) Governor Kazuo speaks at the post-policy meeting press conference on Wednesday, explaining the Bank’s decision to keep the interest rate steady at 0.50%.

Additional quotes

developing story ...

Market reaction

USD/JPY remains strongly bid following these comments. The pair was last seen trading 0.27% higher on the day near 149.75.

• GBP/JPY gains momentum to near 194.40 in Wednesday's early European session, adding 0.20% on the day. 
• BoJ kept interest rates steady amid Trump’s tariff threats. 
• BoE is likely to keep interest rates on hold at 4.5% on Thursday. 

The GBP/JPY cross extends its upside to 194.40 during the early European session on Wednesday. The (JPY) trades slightly weaker after the Bank of Japan (BoJ) decided to keep its policy rate unchanged at its March meeting on Wednesday. The attention will shift to the Bank of England (BoE) interest rate decision on Thursday.

The BoJ kept interest rates steady on Wednesday, as widely expected. The Japanese central bank noted in the statement that "Concerning risks to the outlook, there remain high uncertainties surrounding Japan’s economy and prices, including the evolving situation regarding trade and other policies in each jurisdiction.”

Market players will closely monitor the press conference by BoJ Governor Kazuo Ueda, which might offer some hints about the interest rate path in Japan. The swaps market is now pricing in nearly 71% chance of a hike by July and certainty by October.

The BoE is expected to keep interest rates on hold on Thursday and stick to its mantra of gradual moves amid the heightened economic uncertainty and mixed news on the UK's economy. The markets anticipate the UK central bank to leave its benchmark interest rate on hold at 4.5%, with the next cut likely in May, followed by further reductions in August and November, according to the majority of economists polled by Reuters last week. 

Policymakers will have to wait until the May meeting to discuss the measures taken by Finance Minister Rachel Reeves on March 26 to defend her fiscal rules, which are now under threat due to weaker-than-expected growth and higher borrowing costs.

• EUR/GBP gained support as demand for increased deficit spending rose among the Eurozone’s largest economies.
• Germany approved a landmark €500 billion spending package for defense and infrastructure, substantially raising national debt.
• Traders await the Bank of England’s interest rate decision on Thursday.

EUR/GBP remains steady after gaining in the previous session, hovering around 0.8420 during Asian trading hours on Wednesday. The cross strengthened as the Euro (EUR) found support amid rising demand for increased deficit spending among the Eurozone’s largest economies. In Germany, major political parties—including the CDU/CSU bloc, SPD, and Greens—approved a historic €500 billion spending package for defense and infrastructure, significantly increasing national debt.

Additionally, the Euro may benefit from improved risk sentiment amid hopes for a ceasefire between Russia and Ukraine. On Tuesday, US President Donald Trump and Russian President Vladimir Putin agreed to an immediate pause in strikes on energy infrastructure. However, Putin refused to endorse a broader, month-long ceasefire negotiated by Trump’s team with Ukrainian officials in Saudi Arabia.

On the monetary policy front, traders have scaled back expectations for European Central Bank (ECB) rate cuts this year, now pricing in only two reductions—likely in April and June. Additionally, interest rates are no longer expected to drop below 2%.

The Pound Sterling (GBP) trades cautiously as investors focus on the Bank of England’s (BoE) interest rate decision on Thursday. Markets widely anticipate the BoE will maintain borrowing costs at 4.5%, with a likely 7-2 vote split.

BoE Monetary Policy Committee (MPC) members Catherine Mann and Swati Dhingra are expected to advocate for a rate cut. In February, both pushed for a larger-than-usual 50 basis-point (bps) reduction, while the majority favored a more conventional 25 bps cut.

• USD/CAD attracts buyers for the second straight day, though the upside seems limited.
• A modest USD bounce from a multi-month low is seen lending some support to the pair.
• Any meaningful USD upside, however, seems elusive ahead of the crucial FOMC decision. 

The USD/CAD pair is seen building on the overnight bounce from the 1.4260 area, or a nearly two-week low, and gaining some follow-through positive traction for the second straight day on Wednesday. Spot prices climb back above the 1.4300 mark during the Asian session, though the upside seems limited as traders might opt to wait for the outcome of the highly-anticipated FOMC policy meeting.

Market consensus strongly suggests that the Federal Reserve (Fed) will keep the federal funds rate unchanged at the current range of 4.25% to 4.50%. Hence, the focus will be on updated economic projections and the post-meeting press conference, where comments by Fed Chair Jerome Powell will be scrutinized for cues about the future rate-cut path. This, in turn, will play a key role in influencing the US Dollar (USD) price dynamics and provide some meaningful impetus to the USD/CAD pair.

Heading into the key central bank event risk, some repositioning trade assists the USD to recover slightly from its lowest level since October touched on Tuesday. Apart from this, subdued Crude Oil prices, following the previous day's late pullback from over a two-week high, undermine the commodity-linked Loonie and support the USD/CAD pair. However, the risk of a further escalation of tensions in the Middle East, which could impact supply, helps limit the downside for the black liquid.

Furthermore, a surprise jump in Canada's annual inflation rate, to  2.6% in February or the highest in eight months, might hold back traders from placing aggressive bearish bets around the Canadian Dollar (CAD) and cap the USD/CAD pair. However, the fact that spot prices are holding comfortably above the 100-day Simple Moving Average (SMA) warrants some caution before positioning for an extension of the pair's recent downfall witnessed over the past week or so. 

FX option expiries for Mar 19 NY cut at 10:00 Eastern Time via DTCC can be found below.

EUR/USD: EUR amounts

• 1.0750 1.9b
• 1.0800 2b
• 1.0850 1.2b
• 1.0900 1.8b
• 1.0950 2.1b
• 1.1150 1.2b

GBP/USD: GBP amounts     

• 1.2920 410m
• 1.3025 642m

USD/JPY: USD amounts                                 

• 147.50 452m

USD/CHF: USD amounts     

• 0.8910 450m

AUD/USD: AUD amounts

• 0.6230 1.6b
• 0.6340 1.4b
• 0.6350 666m

USD/CAD: USD amounts       

• 1.4295 634m
• 1.4325 779m
• 1.4565 1.6b

EUR/GBP: EUR amounts        

• 0.8375 425m

• USD/CHF drifts higher to near 0.8770 in Wednesday’s Asian session. 
• Investors await policy announcements from the Fed on Wednesday.
• The SNB is likely to cut its key interest rate by 25 bps on Thursday to 0.25%.

The USD/CHF pair gains ground to around 0.8770 during the Asian session on Wednesday, bolstered by the renewed Greenback demand. The US Federal Reserve (Fed) interest rate decision will take center stage on Wednesday, with no change in rate expected. The attention will shift to the Swiss National Bank (SNB) policy meeting later on Thursday. 

Market consensus suggests that the Fed will keep its federal funds rate unchanged at the current range of 4.25% to 4.50%. Traders will focus on the Press Conference and Summary of Economic Projections (SEP), or ‘dot-plot,’ for more cues about the future interest rate path and the economic outlook. Any hawkish comments from the Fed officials could lift the Greenback against the Swiss Franc (CHF) in the near term. According to the CME FedWatch Tool, the possibility of a rate reduction at the May meeting has risen to 25% from 18% a month ago. 

The Swiss National Bank (SNB) is anticipated to cut its main policy rate by a quarter percentage point on Thursday to 0.25% and hold it there until at least 2026, according to most economists polled by Reuters. “The only significant uncertainty to the view of the SNB holding rates steady at this meeting, for me, stems from a certain dimming of the global growth picture,” said Claude Maurer, chief economist of Basel-based BAK Economics.  

Meanwhile, US President Donald Trump and Russian President Vladimir Putin on Tuesday agreed to an immediate pause in strikes against energy infrastructure in the Ukraine war. However, Putin declined to sign up for the comprehensive month-long ceasefire that Trump's team recently worked out with Ukrainians in Saudi Arabia. Traders will watch the developments surrounding the full ceasefire between Russia and Ukraine. The escalating geopolitical tensions in the Middle East and the ongoing Russia and Ukraine conflict could boost the safe-haven flows, benefiting the CHF. 

Gold prices remained broadly unchanged in India on Wednesday, according to data compiled by FXStreet.

The price for Gold stood at 8,451.82 Indian Rupees (INR) per gram, broadly stable compared with the INR 8,445.86 it cost on Tuesday.

The price for Gold was broadly steady at INR 98,580.41 per tola from INR 98,510.83 per tola a day earlier.

Daily Digest Market Movers: Gold price bulls turn cautious ahead of the highly-anticipated FOMC decision

• Gold price shot to a fresh record high, around the $3,038-3,039 region on Tuesday as rising Middle East tensions and concerns about US President Donald Trump's tariff plans continue to fuel demand for the safe-haven asset.

• Israeli airstrikes on Hamas targets in Gaza, killing more than 400 people. Israeli Prime Minister Benjamin Netanyahu said he ordered strikes because Hamas had rejected proposals to extend the ceasefire held since January. 

• Trump has threatened to impose reciprocal and sectoral tariffs, which he said will come into effect on April 2. This comes on top of a flat 25% duty on steel and aluminum since February, fueling global trade war fears.

• Traders ramp up their bets that the Federal Reserve will have to lower interest rates this year by more than expected amid the rising possibility of an economic downturn on the back of the Trump administration’s aggressive policies. 

• The current market pricing indicated the possibility that the Fed could lower borrowing costs by 25 basis points each at the June, July, and October monetary policy meetings, which further underpins the now-yielding yellow metal.

• The US Dollar stages a modest bounce from over a five-month low touched on Tuesday as traders opt to lighten their bearish bets ahead of the FOMC decision, scheduled to be announced later during the US session this Wednesday. 

• The accompanying monetary policy statement and comments by Fed Chair Jerome Powell will be scrutinized closely for cues about the future rate cut path, which will drive the USD demand and influence the XAU/USD pair.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)

• Silver oscillates in a range near a multi-month high touched on Tuesday.
• The technical setup favors bulls and supports prospects for further gains.
• Any corrective slide could be seen as a buying opportunity near $30.40.

Silver (XAG/USD) consolidates in a range around the $34.00 mark during the Asian session on Wednesday and remains close to its highest level since late October touched the previous day. The technical setup, meanwhile, seems tilted in favor of bulls and suggests that the path of least resistance for the white metal remains to the upside.

This week's bounce from the $33.40 resistance-turned support, along with positive oscillators on the daily chart, validates the constructive outlook and supports prospects for an extension of a nearly three-week-old uptrend. Some follow-through buying beyond the overnight swing high, around the $34.20-$34.25 region, will reaffirm the positive bias and lift the XAG/USD beyond the $34.50-$34.55 intermediate hurdle, towards the $35.00 neighborhood, or a multi-year high touched in October. 

On the flip side, any corrective pullback might continue to find some support near the $33.40 region, below which the XAG/USD could accelerate the fall toward the $33.00 round figure. A convincing break below the latter could pave the way for a fall towards the 100-day Exponential Moving Average (EMA) pivotal support, currently pegged near the $31.50-$31.45 zone. This is followed by the $31.25-$31.20 support, the $31.00 mark, and the late February low, around the $30.80 area. 

Failure to defend the said support levels might shift the near-term bias in favor of bearish traders and make the XAG/USD vulnerable to accelerate the downfall towards the $30.45-$30.40 support en route to the $30.00 psychological mark. The white metal could eventually drop to the $29.55-$29.50 support and test sub-$29.00 levels, or the year-to-date low touched in January.

XAG/USD daily chart

• WTI price declines as Trump and Putin agree to a halt in strikes on energy infrastructure amid the Ukraine war.
• API Weekly Crude Oil Stock rose by 4.593 million barrels in the previous week.
• Escalating violence in the Middle East raises concerns over potential supply disruptions in key Oil-producing regions.

West Texas Intermediate (WTI) Oil price remains under pressure for the second consecutive day, trading around $66.50 per barrel during Asian trading hours on Wednesday. The downward trend is driven by expectations of increased Russian supply.

On Tuesday, US President Donald Trump and Russian President Vladimir Putin agreed to an immediate pause in strikes on energy infrastructure amid the Ukraine war. However, Putin declined to support a broader, month-long ceasefire negotiated by Trump’s team with Ukrainian officials in Saudi Arabia, indicating persistent tensions despite the temporary agreement on energy-related attacks.

As one of the world’s largest Oil producers, Russia has seen its output decline since the war began, largely due to Western sanctions. A potential ceasefire could lead to an easing of these sanctions, potentially increasing Oil supply and further pressuring prices.

Meanwhile, data from the American Petroleum Institute (API) on Tuesday showed a mixed picture for US crude inventories. Crude Oil stockpiles rose by 4.593 million barrels for the week ending March 14, while gasoline inventories declined by 1.71 million barrels and distillate stocks dropped by 2.15 million barrels.

However, geopolitical tensions in the Middle East continue to support Oil prices to some extent. Heightened violence threatens supply disruptions in key oil-producing regions. Trump reaffirmed his administration's commitment to military action against Yemen’s Houthis and warned that Iran would be held accountable for any further attacks disrupting Red Sea shipping. Meanwhile, Israeli airstrikes in Gaza, which ended a week-long ceasefire, resulted in at least 200 casualties, according to Palestinian health authorities, reported by Reuters.

• EUR/USD edges lower to around 1.0935 in Wednesday’s Asian session. 
• The Fed is expected to leave its interest rate unchanged and will update its rate projections on Wednesday. 
• Germany's parliament approved plans for a massive spending surge on Tuesday.

The EUR/USD pair weakens to near 1.0935 during the Asian trading hours on Wednesday, pressured by a modest recovery in the US Dollar (USD). Traders prefer to wait on the sidelines ahead of the US Federal Reserve (Fed) interest rate decision on Wednesday. 

The stronger-than-expected US economic data on Tuesday has provided some support to the Greenback. Data released by the Fed showed that Industrial Production in the United States rose by 0.7% MoM in February, compared to 0.3% in January (revised from 0.5%). This reading came in above the market consensus of 0.2%.

Markets widely expect the US central bank to hold rates steady at its March meeting on Wednesday amid persistent inflation concerns and economic uncertainty. The Press Conference and Summary of Economic Projections (SEP), or ‘dot-plot,’ will be closely watched as it might offer more cues about the economic outlook and the path of US interest rates.

Across the pond, Germany's parliament approved plans for a massive spending surge on Tuesday. This positive development could underpin the shared currency, as the approval of the plans in the Bundestag on Tuesday would provide the chancellor-in-waiting with a windfall of hundreds of billions of euros to boost investment after two years of contraction in Europe's largest economy.

• NZD/USD loses ground as Westpac Consumer Survey indicates weakening consumer confidence in New Zealand.
• Westpac New Zealand reported a decline in its confidence index, falling to 89.2 in Q1 from 97.5 in the prior quarter.
• The US Dollar remains firm as traders adopt caution ahead of the Fed interest rate decision due on Wednesday.

NZD/USD remains subdued for the second consecutive day, hovering around 0.5810 during Wednesday’s Asian session. The pair faces downward pressure following the release of New Zealand’s Q1 2025 Westpac Consumer Survey, which indicated weakening consumer confidence.

Westpac New Zealand reported that its confidence index dropped to 89.2 in Q1 from 97.5 in the previous period, the lowest level since Q2 2024. The decline reflects mounting trade tensions, persistent cost-of-living pressures, and financial market volatility.

However, the NZD/USD pair may find support from market optimism ahead of New Zealand’s quarterly GDP data release on Thursday. Analysts expect a modest 0.4% rebound in Q4, following two consecutive quarters of contraction.

Meanwhile, the US Dollar (USD) remains firm, underpinned by stable Treasury yields as investors await the Federal Reserve’s (Fed) interest rate decision later in the day. Markets widely anticipate the Fed will hold rates steady amid ongoing inflation concerns and economic uncertainty.

The US Dollar Index (DXY) trades near 103.30, while US 2-year and 10-year Treasury yields stand at 4.04% and 4.29%, respectively. However, the Greenback faces pressure from weak US economic data and renewed tariff threats from President Donald Trump, adding to market uncertainty.

Traders are closely monitoring the Fed’s updated economic projections for insights into the future path of US interest rates. Any hawkish signals could further strengthen the USD against its counterparts.

• Gold price sits near a record high amid geopolitical risks and rising trade tensions.
• Fed rate cut bets benefit the non-yielding yellow metal and remain supportive. 
• A modest USD bounce caps the commodity ahead of the crucial FOMC decision.

Gold price (XAU/USD) enters a bullish consolidation phase near the all-time peak as bulls pause for a breather and opt to wait for the outcome of a two-day FOMC policy meeting due later during the US session on Wednesday. Market consensus strongly suggests that the Federal Reserve (Fed) will keep the federal funds rate unchanged at the current range of 4.25% to 4.50%. Hence, the focus will be on updated economic projections and the post-meeting press conference, where comments by Fed Chair Jerome Powell will be scrutinized for cues about the future rate-cut path. This, in turn, will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the non-yielding yellow metal.

Heading into the key central bank event risk, some repositioning trade assists the USD in recovering slightly from its lowest level since October touched on Tuesday and acts as a headwind for the Gold price. The downside, however, remains cushioned in the wake of the uncertainty over US President Donald Trump's aggressive trade policies and their impact on the global economic outlook. Apart from this, the risk of a further escalation of geopolitical tensions in the Middle East continues to act as a tailwind for the safe-haven bullion and supports prospects for an extension of a multi-month-old uptrend. However, slightly overbought conditions on the daily chart might hold back traders from placing fresh bullish bets around the XAU/USD pair.

Daily Digest Market Movers: Gold price bulls turn cautious ahead of the highly-anticipated FOMC decision

• Gold price shot to a fresh record high, around the $3,038-3,039 region on Tuesday as rising Middle East tensions and concerns about US President Donald Trump's tariff plans continue to fuel demand for the safe-haven asset.
• Israeli airstrikes on Hamas targets in Gaza, killing more than 400 people. Israeli Prime Minister Benjamin Netanyahu said he ordered strikes because Hamas had rejected proposals to extend the ceasefire held since January. 
• Trump has threatened to impose reciprocal and sectoral tariffs, which he said will come into effect on April 2. This comes on top of a flat 25% duty on steel and aluminum since February, fueling global trade war fears.
• Traders ramp up their bets that the Federal Reserve will have to lower interest rates this year by more than expected amid the rising possibility of an economic downturn on the back of the Trump administration’s aggressive policies. 
• The current market pricing indicated the possibility that the Fed could lower borrowing costs by 25 basis points each at the June, July, and October monetary policy meetings, which further underpins the now-yielding yellow metal.
• The US Dollar stages a modest bounce from over a five-month low touched on Tuesday as traders opt to lighten their bearish bets ahead of the FOMC decision, scheduled to be announced later during the US session this Wednesday. 
• The accompanying monetary policy statement and comments by Fed Chair Jerome Powell will be scrutinized closely for cues about the future rate cut path, which will drive the USD demand and influence the XAU/USD pair.

Gold price needs to consolidate before the next leg up amid slightly overbought RSI on the daily chart

The daily Relative Strength Index (RSI) is holding above the 70 mark, suggesting slightly overbought conditions. Heading into the key central bank event risk, this makes it prudent to wait for some near-term consolidation or a modest pullback before traders start positioning for any further appreciating move. Meanwhile, the recent breakout and acceptance above the $3,000 psychological mark suggests that the path of least resistance for the Gold price remains to the upside. 

Meanwhile, any corrective slide could be seen as a buying opportunity and remain limited near the $3,005-3,000 area. This is followed by support near the $2,980-2,978 region, which if broken might prompt some technical selling and drag the Gold price to the $2,956 zone. The downward trajectory could extend further towards the $2,930 intermediate support before the XAU/USD eventually drops to the $2,900 mark en route to last week's swing low, around the $2.880 region.

• EUR/JPY trades in positive territory near 163.45 in Wednesday’s Asian session. 
• The BoJ left policy settings unchanged at its March meeting on Wednesday.
• Germany's parliament approved plans for a massive spending surge on Tuesday, supporting the Euro.

The EUR/JPY cross extends the rally to around 163.45 during the Asian trading hours on Wednesday. As widely expected, the Bank of Japan (BoJ) decided to keep its policy rate unchanged on Wednesday after three hikes in the year since it ended the world’s last negative interest rate. The attention will shift to the Harmonized Index of Consumer Prices (HICP) inflation data from the Eurozone and the speeches from the European Central Bank (ECB) policymakers later on Wednesday. 

The BoJ decided to keep the short-term interest rates target unchanged in the range of 0.40%- 0.50% at its March meeting on Wednesday. The decision aligned with the market expectations. The Japanese Yen (JPY) trades slightly weaker against the Euro (EUR) in an immediate reaction to the rate decision. The swaps markets are now pricing in nearly 71% odds of a hike by July and certainty by October.

Investors will keep an eye on the press conference by BoJ Governor Kazuo Ueda, which might offer some hints about the interest rate path in Japan. Meanwhile, the heightened economic uncertainty and rising geopolitical tensions in the Middle East could boost the safe-haven flows, which might underpin the JPY. 

On the Euro front, the German parliament's approval of plans for a massive spending surge throws off decades of fiscal conservatism in hopes of boosting economic growth and scaling up military spending for a new era of European collective defence. This, in turn, lifts the shared currency against its rivals. "Germany, and by extension the euro zone, getting their fiscal act together is not only long overdue, but supports the bull case for the common currency over the medium-term," noted Michael Brown, senior research strategist at Pepperstone.

• AUD/JPY holds steady following the Bank of Japan’s interest rate decision.
• The BoJ maintained its short-term interest rate target within the 0.40%-0.50% range in March.
• The Australian Dollar remains stable as traders exercise caution ahead of the Fed’s interest rate decision due on Wednesday.

AUD/JPY remains firm near 95.10 during Asian trading hours on Wednesday, following the Bank of Japan’s (BoJ) interest rate decision. As widely expected, the BoJ kept its short-term interest rate target within the 0.40%-0.50% range after concluding its two-day monetary policy review.

The BoJ’s BoJ Monetary Policy Statement noted that Japan's economy is recovering moderately, though some weak signs persist. Consumption is increasing gradually, and inflation expectations are rising at a measured pace. However, risks remain, particularly regarding global trade policies and their impact on overseas economies and prices.

BoJ Governor Kazuo Ueda reiterated the central bank’s readiness to raise interest rates further if inflation moves sustainably toward its 2% target. Speaking in parliament on March 12, Ueda emphasized that long-term interest rates are influenced by market expectations for the BoJ’s short-term policy stance, reinforcing the possibility of hikes later in the year.

Meanwhile, the Australian Dollar (AUD) remains steady as traders adopt a cautious stance ahead of the Federal Reserve’s (Fed) interest rate decision later in the day. Markets expect the Fed to hold rates steady amid persistent inflation concerns and economic uncertainty.

On the domestic front, Australia's Westpac-Melbourne Institute Leading Index rose by 0.1% month-over-month in February 2025, maintaining the same pace as the previous month. The six-month annualized growth rate in the index, which provides insight into the economy’s future trajectory, climbed to 0.8% from 0.6%. This reflects continued domestic resilience despite waning support from currency and commodity markets.

• GBP/USD inches lower as traders adopt caution ahead of the Federal Reserve’s policy decision due on Wednesday.
• The Fed is expected to leave interest rates unchanged, highlighting persistent inflation concerns and economic uncertainty. 
• Traders anticipate the Bank of England will also maintain borrowing costs at 4.5%, with a likely 7-2 vote split.

GBP/USD edges lower, trading around 1.2990 during Asian hours on Wednesday after posting gains in the previous two sessions. The pair struggles as the US Dollar (USD) remains firm, supported by stable US Treasury yields ahead of the Federal Reserve’s (Fed) interest rate decision later in the day. Markets widely expect the Fed to hold rates steady amid persistent inflation concerns and economic uncertainty.

The US Dollar Index (DXY), which measures the USD against six major currencies, trades near 103.40. Meanwhile, yields on 2-year and 10-year US Treasury bonds stand at 4.04% and 4.29%, respectively, at the time of writing. However, the Greenback faced pressure from weak US economic data and renewed tariff threats from US President Donald Trump, adding to investor uncertainty.

Traders are closely watching the Fed’s updated economic projections for further clues on the future path of US interest rates. Any hawkish signals from Fed policymakers could strengthen the USD against its counterparts.

Adding to the political landscape, “The Wall Street Journal” reports that Trump has dismissed two Democratic Federal Trade Commission (FTC) commissioners. Uncertainty lingers over whether he has the authority to do so, fueling speculation about whether this move sets the stage for potential firings of Fed Chair Jerome Powell and other Federal Reserve members.

The Pound Sterling (GBP) trades cautiously as investors focus on the Bank of England’s (BoE) interest rate decision on Thursday. Markets widely expect the BoE to keep borrowing costs unchanged at 4.5%, with a likely 7-2 vote split.

BoE Monetary Policy Committee (MPC) members Catherine Mann and Swati Dhingra are expected to advocate for a rate cut. In the February meeting, both officials pushed for a larger-than-usual 50 basis-point (bps) reduction, while the majority favored a more conventional 25 bps cut.

• The Japanese Yen attracts some sellers following the release of softer domestic data.
• A modest USD recovery from a multi-month trough further lends support to USD/JPY.
• Traders seem reluctant to place aggressive bets ahead of the BoJ-Fed policy decisions.

The Japanese Yen (JPY) edges lower during the Asian session on Wednesday in reaction to weaker-than-expected domestic data, though it lacks follow-through selling as traders seem reluctant ahead of the Bank of Japan (BoJ) decision. The Japanese central bank is widely anticipated to keep the short-term interest rate steady at 0.50% amid the uncertainty over US President Donald Trump's trade policies and their impact on the economy. Hence, investors will look for signals on the timing and the scope of future rate hikes by the BoJ.

The focus will then shift to the outcome of a two-day FOMC policy meeting due to be announced later during the US session. The US central bank is also expected to leave interest rates unchanged, though the markets are pricing in the possibility of three 25 basis points rate cuts by the end of this year. This marks a big divergence in comparison to the BoJ's hawkish stance, which has resulted in the recent sharp narrowing of the US-Japan rate differential and should continue to act as a tailwind for the lower-yielding JPY. 

Japanese Yen bulls remain on the defensive in the wake of unimpressive domestic data, ahead of the BoJ 

• Data released earlier this Wednesday showed that Japan's Trade Balance shifted to a surplus of ¥584.5 billion in February from a deficit of ¥415.43 billion in the same month a year earlier. The reversal was driven by a surge in exports, which increased by 11.4% YoY, and a larger-than-expected fall of 0.7% in imports. 
• Meanwhile, Japan’s Machinery Orders fell 3.5% MoM in January 2025, significantly worse than the 1.2% decline registered in the previous month. On an annual basis, Machinery Orders rose 4.4% during the reported month, slightly above December’s 4.3% increase, though the reading was below the 6.9% forecast.
• Adding to this, a Reuters Tankan poll indicated that business sentiment among Japanese manufacturers worsened for the first time in three months during March amid concerns about US tariff policies and weakness in China’s economy. In fact, the manufacturers’ index came in at -1, down from +3 in February. 
• Investors now look forward to the crucial Bank of Japan decision. This, along with the accompanying policy statement and BoJ Governor Kazuo Ueda's comments at the post-meeting press conference, could provide cues about the likely timing of the next interest rate hike and influence the Japanese Yen.
• The results of Japan's annual spring labor negotiations, which concluded on Friday, showed that firms largely agreed to union demands for strong wage growth for the third straight year. This could boost consumer spending and contribute to rising inflation, giving the BoJ headroom to keep hiking rates.
• Investors on Wednesday will also focus on the outcome of a two-day FOMC monetary policy meeting, due to be announced later during the US session. Heading into the key central bank event risks, a modest US Dollar recovery from a multi-month low pushes the USD/JPY pair back above mid-149.00s.

USD/JPY needs to find acceptance above the 150.00 psychological mark to support prospects for further gains

From a technical perspective, the recent breakout above the 100-period Simple Moving Average (SMA) on the 4-hour chart was seen as a key trigger for bulls. Moreover, oscillators on the said chart are holding comfortably in positive territory and support prospects for additional gains. That said, the overnight failure ahead of the 150.00 psychological mark warrants some caution. Hence, it will be prudent to wait for a sustained strength beyond the said handle before positioning for a move towards the 150.75-150.80 region, or the 200-period SMA on the 4-hour chart, en route to the 151.00 round figure. 

On the flip side, the 149.20 area, followed by the 149.00 mark and the 148.80 region (100-period SMA on the 4-hour chart) should act as immediate support. A convincing break below the latter will suggest that the recent move-up witnessed over the past week or so has run out of steam and drag the USD/JPY pair to the 148.25-148.20 support en route to the 148.00 mark. The downward trajectory could extend further towards the 147.70 area, 147.20 region, and the 147.00 mark before spot prices eventually drop to retest a multi-month low, around the 146.55-146.50 region touched on March 11.

• The Australian Dollar remains steady as traders exercise caution ahead of the Federal Reserve's interest rate decision.
• Australia’s Treasurer Jim Chalmers criticized the Trump administration’s trade policies, calling them "self-defeating and self-sabotaging."
• The Fed is expected to keep interest rates unchanged on Wednesday, citing persistent inflation concerns and ongoing economic uncertainty.

The Australian Dollar (AUD) remains steady on Wednesday after experiencing losses in the previous session. The AUD/USD pair holds its ground as the US Dollar (USD) stays firm, supported by stable US yields ahead of the Federal Reserve’s (Fed) interest rate decision later in the day. No changes in rates are expected amid persistent inflation concerns and heightened economic uncertainty.

Australia’s Westpac Leading Index rose to 0.8% in February, up from 0.6% in January, reflecting continued domestic resilience despite fading currency and commodity tailwinds. The impact of tariff shocks is beginning to surface, but domestically driven factors are providing solid support.

Treasurer Jim Chalmers addressed trade tensions in a speech on Tuesday, rejecting a "race to the bottom" on tariffs. Chalmers criticized the Trump administration’s trade policies as "self-defeating and self-sabotaging," emphasizing Australia’s need to focus on economic resilience rather than retaliation. He also condemned the US decision to exclude Australia from steel and aluminum tariff exemptions, calling it "disappointing, unnecessary, senseless, and wrong."

On Monday, Reserve Bank of Australia (RBA) Assistant Governor (Economic) Sarah Hunter reiterated the central bank’s cautious stance on rate cuts. The RBA’s February statement signaled a more conservative approach than market expectations, with a strong focus on monitoring US policy decisions and their potential impact on Australia’s inflation outlook. 

Australian Dollar remains stable as traders adopt caution ahead of Fed policy decision

• The US Dollar Index (DXY), which tracks the USD against six major currencies, is trading positively near 103.40 at the time of writing. However, the Greenback faces headwinds as weak US economic data and renewed tariff threats from President Donald Trump add to investor uncertainty.
• Market participants are closely watching the Federal Reserve’s updated economic projections for insights into the future path of US interest rates. Any hawkish signals from Fed policymakers could provide support for the USD against its peers.
• The US Census Bureau reported on Monday that Retail Sales increased by 0.2% month-over-month in February, falling short of the market expectation of 0.7%. This followed a revised decline of -1.2% in January (previously reported as -0.9%). On a yearly basis, Retail Sales grew by 3.1%, down from the revised 3.9% in January (previously 4.2%).
• On Tuesday, US President Donald Trump and Russian President Vladimir Putin agreed to an immediate pause in strikes targeting energy infrastructure in the Ukraine war. In a Truth Social post following his call with Putin, Trump stated that both sides had committed to a 30-day halt on attacks against each other's energy infrastructure, mirroring statements from the Kremlin.
• However, Putin declined to endorse a broader month-long ceasefire negotiated by Trump’s team with Ukrainian officials in Saudi Arabia, signaling continued tensions despite the temporary agreement on energy targets.
• US President Donald Trump reaffirmed plans to impose reciprocal and sectoral tariffs on April 2. Trump confirmed that there would be no exemptions for steel and aluminum and mentioned that reciprocal tariffs on specific countries would be implemented alongside auto duties.
• Australian Prime Minister Anthony Albanese confirmed that Australia will not impose reciprocal tariffs on the US, emphasizing that retaliatory measures would only raise costs for Australian consumers and fuel inflation.
• China introduced a special action plan over the weekend aimed at boosting consumption and improving market sentiment across the region. The plan includes measures to raise wages, encourage household spending, and stabilize stock and real estate markets. Any positive developments related to the Chinese stimulus plan could further support the AUD, given China’s role as a key trading partner for Australia.
• China's retail sales grew by 4.0% year-over-year in January-February, improving from December’s 3.7% increase. Meanwhile, industrial production rose 5.9% YoY during the same period, exceeding the 5.3% forecast but slightly lower than the previous reading of 6.2%.

Australian Dollar finds resistance at 0.6400 near three-month highs

The AUD/USD pair is trading around 0.6360 on Wednesday, maintaining its bullish trajectory as it continues to climb within the ascending channel on the daily chart. The 14-day Relative Strength Index (RSI) remains above 50, reinforcing the positive momentum.

On the upside, the AUD/USD pair may attempt to retest its three-month high of 0.6408, last reached on February 21. A breakout above this level could strengthen the bullish bias, potentially driving the pair toward the upper boundary of the ascending channel near 0.6490.

Key support lies at the nine-day Exponential Moving Average (EMA) of 0.6334, aligned with the lower boundary of the ascending channel. Further support is seen at the 50-day EMA at 0.6311. A decisive break below this critical zone could weaken the bullish outlook, exposing the AUD/USD pair to further downside pressure toward the six-week low of 0.6187, recorded on March 5.

AUD/USD: Daily Chart

• The Indian Rupee softens on Wednesday’s early Asian session. 
• Geopolitical risks and Trump’s tariff threats weigh on the INR, but persistent weakness in USD might help limit its losses. 
• The Fed rate decision will take center stage later on Wednesday. 

The Indian Rupee (INR) loses ground on Wednesday after reaching over a three-week high in the previous session. The escalating geopolitical tensions in the Middle East weigh on the Indian currency. The upcoming reciprocal tariffs from US President Donald Trump on April 2 could also exert some selling pressure on the INR in the near term.   

However, a broadly weaker Greenback and an uptick in exporter US Dollar (USD) sales could provide some support to the local currency. Additionally, India’s latest current account data, which showed a surplus in February, might contribute to the INR’s upside.

All eyes will be on the Federal Reserve (Fed) interest rate decision on Wednesday, which is expected to hold interest rates steady. Investors will closely monitor the Press Conference and Summary of Economic Projections (SEP), or ‘dot-plot’ as it might offer some hints about views on the economy and possibly the future path for interest rates.

Indian Rupee softens ahead of Fed rate decision

• India’s Wholesale Price Index (WPI) inflation rose to 2.38% in February from 2.31% in January, the Ministry of Commerce and Industry reported on Monday. This figure came in hotter than the estimation of 2.36%.
• A White House official said late Tuesday that reciprocal tariffs still intended to take effect from April 2
• US Industrial Production rose by 0.7% MoM in February, versus 0.3% prior (revised from 0.5%), according to the Federal Reserve on Tuesday. This reading came in better than the market expectation for a growth of 0.2%.
• Building permits in the US fell by 1.2% to a seasonally adjusted annualized rate of 1.456 million in February, slightly higher than market expectations of 1.450 million. It was the biggest drop in five months.
• US Housing Starts jumps by 11.2% to an annual rate of 1.501 million in February after plunging by 11.5% to a revised rate of 1.350 million in January.
• The odds of a rate cut at the May meeting have risen to 25% from 18% a month ago, according to the CME FedWatch Tool. 

USD/INR remains constructive in the longer term 

The Indian Rupee weakens on the day. In the longer term, the USD/INR pair keeps the bullish vibe on the daily chart, with the price holding above the key 100-day Exponential Moving Average (EMA). However, in the near term, the pair has broken out of a symmetrical triangle, while the 14-day Relative Strength Index (RSI) stands below the midline near 42.60, suggesting that further downside cannot be ruled out. 

The key resistance level for USD/INR is seen near the 87.00 psychological level. Consistent trading above this level could pave the way to 87.38, the high of March 11, en route to 87.53, the high of February 28.

On the flip side, the initial support level is located at 86.48, the low of March 18. A breach of the mentioned level could open the door for a move toward 86.14, the low of January 27, followed by 85.60, the low of January 6. 

On Wednesday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1697 as compared to the previous day's fix of 7.1733 and 7.2330 Reuters estimate.