This is what you need to know to trade today Wednesday March 16:
Risk-appetite money flows dominate financial markets early on Wednesday as investors hope for a diplomatic solution to the crisis between Russia and Ukraine, and the US dollar remains on the defensive. Retail sales and import price index data will be released during the American session before the Federal Reserve decision on interest rates. Canada’s CPI consumer price index data will also be scrutinized for further impetus. In addition, negotiations between Russian and Ukrainian representatives will continue on Wednesday.
Russian President Vladimir Putin said on Tuesday that kyiv was not serious about finding a mutually acceptable solution to the conflict. Although this news made investors cautious during the American session, the main Wall Street indices managed to post decisive gains on the day. On the other hand, Ukrainian President Volodymyr Zelenskyy noted in a video statement that negotiations were already sounding more realistic.
Reflecting the positive sentiment of risk appetite in the market, China’s Shanghai Composite Index gained more than 3% and Japan’s Nikkei 225 index rose 1.6%. At the start of the European session, US stock index futures are up between 0.3% and 0.8%.
Later in the day, the Fed is widely expected to raise its policy rate by 25 basis points. Investors will pay close attention to the updated summary of economic projections and FOMC Chairman Jerome Powell’s comments on future monetary policy prospects.
See: Fed Preview: Powell will send the dollar lower with a moderate rise and a message of uncertainty
See: Federal Reserve Interest Rate Decision Preview: Is History a Guide?
See: Federal Reserve Preview: Gold needs dovish Fed to regain traction
The EUR/USD it failed to hold above 1.1000 on Tuesday and ended up closing the day largely unchanged at 1.0950. The pair remains relatively calm below 1.1000 at the start of the European session on Wednesday.
The GBP/USD closed for the second consecutive day in positive territory on Tuesday despite losing its upside momentum near 1.3100. The pair is trading sideways near 1.3050 in early European morning.
After losing almost 2% on Monday, the gold fell 1.5% on Tuesday and touched its lowest level in two weeks below $1,910. The XAU/USD is consolidating its losses above $1,910 as US Treasury yields consolidate sideways.
The USD/JPY hangs on to weekly gains above 118.00 as JPY struggles to find safe haven demand. The Kyodo news agency reported earlier in the day that the Japanese government was considering compiling a new economic package amid the crisis between Russia and Ukraine.
The Bitcoin it has risen to a six-day high above $41,700 earlier in the day, but has returned below $40,000. The ethereum is moving higher after posting gains for the past two days and is up 1% on the day above $2,600.
Source: Fx Street
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