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Forex Today – Asian Session: Currencies Respond to Improved Market Sentiment, Fed Takes Center Stage

Here’s what to know on Tuesday, March 21:

Wall Street celebrated the news of the weekend (purchase of Credit Suisse by UBS and coordinated action by central banks). The Dow Jones rose more than 1%. US yields ended sideways after hitting fresh monthly lows, with the 10-year yield bouncing towards 3.50%. The CBOE Volatility Index (VIX) fell nearly 6%, while he Dollar Index fell 0.54%, recording the lowest close in a month.

The foreign exchange market responded to the improvement in market sentiment. The evolution of the banking sector and the meeting of the Federal Reserve will be key for the next sessions. The FOMC meeting begins on Tuesday. The US central bank is in a difficult position. The market values ​​the probability of a 25 basis point rate hike at 70%, with attention paid to forward guidance and the wording of the statement.

The government of French President Emmanuel Macron survived a vote of no confidence. The president of the European Central Bank (ECB), Christine Lagarde, spoke in the European Parliament and repeated that inflation is expected to remain “too high” for “too long”. In Germany, the Producer Price Index for February rose 15.8% compared to a year ago, which represents a smaller deceleration than expected. The EUR/USD rose above 1.0700, approaching last week’s high, while the EUR/CHF shot up to 0.9960.

GBP/USD It broke out of its 5-day trading range and rose above 1.2270, the highest level since early February. The Bank of England will announce its monetary policy decision on Thursday.

On Monday, the kiwi was one of the worst performing pairs, with the NZD/USD retreating from monthly highs to 0.6230. New Zealand will release trade data on Tuesday. AUD/USD remains above 0.6700 after bouncing off 0.6660. The Reserve Bank of Australia (RBA) will publish the minutes of its last meeting.

USD/CAD fell, matching last week’s low at 1.3650, a key support zone reinforced by the 20-day SMA. On Tuesday, Canada will report the Consumer Price Index for February, with a forecast increase of 0.6% in February.

He Gold It stabilized around $1,980 in a volatile session that included a fresh 1-year high above $2,000 and a correction to $1,965. the bitcoin it fell slightly to $28,000 in a session where it hit a new nine-month high. Crude oil prices hit their lowest since December 2021 and rebounded, rising nearly 2%. The improved sentiment helped offset concerns about the economic undercurrent.


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Source: Fx Street

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