This is what you need to know to trade today Thursday March 17:
The risk appetite money flows dominated financial markets during the second half on Wednesday despite aggressive policy views from the US Federal Reserve. The US dollar index, which fell 0.6% on Wednesday, remains relatively quiet in early Thursday as investors await the EU inflation report, the Bank of England (BoE) decision and mid-level data. from the United States. Meanwhile, market sentiment remains mixed amid conflicting news on the conflict between Russia and Ukraine.
The Fed increased its monetary policy rate by 25 basis points after their two-day meeting in a widely anticipated decision. The summary of economic projections, the so-called dot plot, revealed that policymakers they expected six more rises this yearwith the policy rate set to reach 1.9% by the end of 2022 before rising to 2.8% by the end of 2023. Although the initial market reaction sent US bond yields moving higher and helped the dollar gain strength against your rivals, FOMC Chairman Jerome Powell’s comments calmed markets.
Powell said they still expected inflation to ease in the second half of the year despite growing uncertainty and assured markets that they will tackle inflation without hurting economic activity. “We are firmly committed to not allowing high inflation to take holdPowell pointed out.The good news is that the economy and job market are strong enough, they can handle interest rate increases“.
The Financial Times reported late on Wednesday that Ukraine and Russia had made significant progress towards a possible peace agreement. This headline revived optimism for a ceasefire, but the Ukrainian side has rejected the proposed neutrality. In addition, several journalists pointed out that Ukraine sees Russia’s positive change in tone as an attempt to ease sanctions pressure.
The EUR/USD closed for the second day in a row in positive territory on Wednesday, but struggled to break above 1.1050. The pair is trading in a relatively tight range near 1.1030 early on Thursday.
The GBP/USD extended its rally after breaking above 1.3100 and is holding on to small daily gains above 1.3150 at the start of the European session. The BoE is expected to raise its policy rate by 25 basis points later in the session.
See: BoE interest rate decision preview: A hat-trick and a difficult balancing act
Driven by rising US Treasury yields, the USD/JPY reached its highest level in six years above 119.00 on Wednesday. The pair has pulled back during Asian trading hours but appears to have settled above 118.50.
The gold fell below $1,900 for the first time in March as an immediate reaction to the Fed’s monetary policy statement on Wednesday. However, XAU/USD managed to reverse its direction during Powell’s press conference and continued to move higher during the Asian session. At time of writing he is holding on to modest daily gains above $1,930.
The Bitcoin capitalized on the risk-positive sentiment and surged above $40,000 late on Wednesday. BTC/USD remains in a consolidation phase near $41,000 at the start of the European session on Thursday. The ethereum It gained almost 6% on Wednesday and is now trading in a tight range above $2,700.
Source: Fx Street
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