TD Securities strategists Oscar Munoz and Eli Nir argue that the Federal Reserve (Fed) faces conflicting signals as the Iran conflict drives an Oil shock.
Here is what you need to know on Wednesday, March 18:
UBS' Chief Economist Paul Donovan notes that the Federal Reserve is widely expected to keep policy unchanged, with attention centered on Fed Chair Powell’s press conference. Markets are looking for Powell’s reaction to Oil prices, the war and implications for US retail gasoline.
UOB analysts note the broad Dollar index DXY fell for a second day to 99.57 as traders positioned ahead of the Fed decision and reacted to geopolitical tensions around Iran.
The NZD/USD pair strives to extend its recovery move above 0.5870 during the European trading session on Wednesday. The Kiwi trades higher as the US Dollar (USD) struggles to gain ground ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.
Gold (XAU/USD) reverses a modest intraday dip and trades just above the $5,000 psychological mark during the first half of the European session on Wednesday.
The EUR/USD pair faces slight pressure near 1.1550 during the European trading session on Wednesday after a two-day recovery move. The major currency pair struggles as the US Dollar strives to regain ground ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.
The Indian Rupee (INR) posts a fresh all-time low against the US Dollar (USD) at 93.00 during India's afternoon trading hours on Wednesday.
ING strategist Francesco Pesole argues that a hawkish revision of the Federal Reserve Dot Plot could support the Dollar, with markets already pricing limited cuts.
MUFG’s Derek Halpenny expects the FOMC to keep policy options open, with limited changes to the Summary of Economic Projections and no alteration to the median dot profile. MUFG anticipates balanced Fed communication and subdued FX and rates volatility.
GBP/USD steadies after posting gains over the previous two sessions, hovering around 1.1350 during Asian trading hours on Wednesday.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 99.60 during the Asian trading hours on Wednesday.
