HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
Exness information and reviews
Exness
86%

Dollar rises as Fed enters spotlight, yen plummets


20 March 2024

Raffi Boyadjian   Written by Raffi Boyadjian

Will the Fed revise its dot plot higher?

The US dollar traded higher against its major counterparts yesterday, gaining the most versus the yen, the kiwi and the loonie in that order. The greenback continued trading on the front foot today as well.

The buying of the dollar suggests that investors are likely expecting a hawkish outcome from today’s FOMC decision, and this is evident by the fact that they continued pushing back their rate-cut bets. According to Fed funds futures, they are now penciling in a 68% chance for a 25bps reduction in June, with the total number of basis points worth of cuts anticipated by the end of the year dropping to 75, in line with the Fed’s December dot plot.

Taking that into account, the Fed’s updated interest rate projections may be of major importance today. With the US economy faring better than most of its major peers and inflation proving to be stickier than expected, there has been speculation that the dot plot may be revised up to indicate two quarter-point rate cuts by the end of the year. Such a decision would provide room for further upside adjustment to the market’s own implied path and thereby add more fuel to the dollar’s engines.

Yen falls after BoJ; will the intervention alarm bells ring?

The yen was the main loser, tumbling more than 1.5%, even after the BoJ’s historic decision to end eight years of negative interest rates and entirely abolish its yield curve control policy.

With reports already preparing investors that policymakers may decide to press the hike button at this gathering, the decision came as no surprise, while the Bank’s announcement that they will continue government bond purchases with broadly the same amounts as before makes the abandonment of yield curve control not such a material change.

Combined with Governor Ueda’s remarks that they will maintain accommodative monetary policy conditions, the meeting’s decisions did not add any extra hawkishness to the market’s own perception. Investors continued to believe that any subsequent rate increases are likely to be very gradual and slow as several members have telegraphed ahead of the meeting, assigning around an 83% chance for the next 10bps hike to be delivered in September.

For the yen to change course and begin a long-lasting recovery, data and headlines may need to start suggesting that another rate increase may be appropriate sooner than the market expects. Otherwise, further declines may trigger another round of verbal intervention by Japanese officials.

Loonie falls after CPI data, pound awaits BoE

The Canadian dollar was also among the major losers, getting knocked down after the Canadian CPIs for February came in lower than expected, prompting investors to add to their BoC rate cut bets. From 20%, the probability of a 25bps reduction at the Bank’s upcoming decision has risen to around 25%, while the total number of basis points worth of cuts expected by December has increased to around 75 from 65.

Today, it was the UK’s turn to release inflation numbers, with both the headline and core CPI rates for February coming in lower than anticipated. However, the pound barely reacted to the data, perhaps as traders preferred to avoid large positions ahead of tomorrow’s BoE decision.

Wall Street in the green, oil extends rally on supply concerns

On Wall Street, all three of its main indices closed in the green, with the Dow Jones gaining the most ground. The chip-making giant Nvidia erased early losses to close 1% up after it revealed details of its highly anticipated Blackwell B200 artificial intelligence chip that could be 30 times faster than previous chips.

Although equities could pull back if the Fed appears hawkish today, prompting investors to further push back their rate cut bets, the Nvidia story suggests that AI-related future growth opportunities are not fully factored into the market. Thus, any Fed-associated declines may be seen as a corrective phase, providing renewed buying opportunities.

Oil prices extended their gains on Tuesday as supply concerns remained elevated due to attacks by Ukraine on Russian refinery facilities. Even if this proves to be a temporary event, oil prices may continue to gather support from declining exports from Saudi Arabia and Iraq, as well as signs of improving demand and economic growth in the US and China.

by XM.com

#source


RELATED

Fed cut expected, market reaction hinges on multiple factors

Fed meeting today; rate decision at 18:00 GMT, Powell speaks 30 minutes later; A 25bps cut is expected but details matter for markets, particularly the dot plot; Powell expected to follow the Jackson Hole script; all eyes on possible signals about October.

17 Sep 2025

Dollar drops as Fed rate cut looms

US dollar and Treasury yields drop ahead of Fed decision. President Trump urges Powell to deliver bigger cut. Pound up after jobs data, yen gains on BoJ hike bets. S&P 500, Nasdaq and gold hit new record highs.

16 Sep 2025

Risk sentiment on the mend as investors gear up for Fed decision

A defining week has just started, with investors counting down to Wednesday’s pivotal Fed meeting.

15 Sep 2025

Risk appetite improves but investors stay vigilant

Dollar and US equities rally; crypto market is indecisive; Volatility remains elevated despite improved risk sentiment; US PPI data could show tariff impact ahead of CPI report; Gold and oil are supported by broader geopolitical tensions.

10 Sep 2025

Fragile risk appetite as US data boost Fed cut bets

Softer US jobs data leave door open for a larger Fed rate cut; Dollar and US equities try to find their footing today; Yen under pressure after PM Ishiba’s resignation; Gold and oil rally, supported by weaker dollar and geopolitical tensions.

8 Sep 2025

Risk appetite firms up as investors anticipate softer US data

Risk sentiment improves, dollar slightly under pressure; Gold holds gains, bond yields ease across the board; Today’s NFP could determine the size of the Fed rate cut; Decent market reaction if jobs data delivers a strong upside surprise.

5 Sep 2025

Risk markets jittery as expectations for soft US data mount

Risk sentiment remains fragile ahead of the first batch of key US data; Gold and rising bond yields continue to unnerve investors; ADP report and ISM Services PMI might open the door to a 50bps Fed cut; Fedspeak to intensify, markets to digest Miran’s hearing headlines today;

4 Sep 2025

Calm before the storm in markets ahead of pivotal US data

Dollar on the back foot, equities remain wobbly; Court battles in focus after Friday’s tariffs ruling; Investors prepare for critical US data; all eyes on Friday’s jobs report; Uncertainty boosts gold and silver.

1 Sep 2025

Dollar extends slide as Bessent talks double rate cut

Dollar slips on increasing Fed rate cut bets. Treasury Sec. Bessent favors a 50bps reduction. Yen rallies on concerns about BoJ’s inflation metric. S&P 500, Nasdaq and Bitcoin climb to new record highs.

14 Aug 2025

Dollar slips as CPI data increase September Fed cut bets

US headline CPI holds steady, but core CPI accelerates; Still, the miss in the headline rate increases September cut bets; Gold slightly up, but traders remain cautious ahead of Trump-Putin talks

13 Aug 2025

Markets on edge, await US inflation figures

Muted risk appetite ahead of critical US inflation report; Strong CPI report could derail Fed rate cut expectations, boost the dollar; Gold and oil hold steady as Trump-Putin meeting nears; Aussie ignores RBA cut.

12 Aug 2025

Tariff and Fed developments weigh on dollar’s recovery

Muted risk appetite; equity indices edge higher, bitcoin struggles; August 12 deadline for US-China truce in the spotlight; Gold flirts with $3,400 as US prepares to tariff gold bar imports.

8 Aug 2025

Dollar suffers from Trump’s tariff announcements

Tariffs back in the spotlight; China could be next; Equities shrug off tariff headlines but dollar weakens; Gold rises despite progress made in the US-Russia talks; BoE to cut rates; pound’s performance hinges on degree of dovishness.

7 Aug 2025

Dollar seeks direction as Trump’s TV appearance could hurt risk appetite

Following a disastrous Friday for dollar assets, both the US dollar and US equity indices are showing tentative signs of life.

5 Aug 2025

US jobs data may challenge the dollar’s recent strength

Despite the eventful calendar so far this week – with the FOMC meeting and the various tech stock earnings standing out – market volatility had remained low until yesterday.

1 Aug 2025

Dollar rally pauses as Fed signals patience once again

Both the US dollar and US equity indices are trying to find their footing after the critical FOMC meeting.

31 Jul 2025

Dollar strength persists ahead of key events

Both the dollar and US equities start the week on a strong note; Euro suffers as European leaders challenge the US-EU trade deal; Gold retreat stalls; oil fails to materially benefit from Trump's Russia comments.

29 Jul 2025

Dollar on the defensive, seeks support

ECB pauses, raises the bar for September rate cut; Trump’s Fed visit proves uneventful, despite rate cut demand; Dollar losses mount this week, even the yen outperforms the greenback; Cryptos are on the back foot today; altcoins maintain sizeable gains.

25 Jul 2025

EU and US close to a trade deal ahead of ECB decision

After Japan, the US is nearing a trade accord with the EU. S&P Global PMIs in focus ahead of next week’s FOMC decision. ECB to stand pat, Lagarde’s signals to be key for the euro. S&P 500 hits a new record high, but earnings results come in mixed.

24 Jul 2025

Dollar strength undermined by Trump's Fed criticism

Trump firmly holds the keys to market volatility; A July rate cut is likely written off unless data turns negative; US Treasury yields have taken notice of Trump’s criticism of Powell; Pound benefits from euro’s troubles despite mixed UK data.

17 Jul 2025


Editors' Picks

How to Choose the Best Forex Advisor 2025

Key Factors to Consider When Choosing a Forex Advisor. Risk Management. Fees and Costs. Compatibility with Your Trading Style.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2025

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Just2Trade information and reviews
Just2Trade
76%
FXNovus information and reviews
FXNovus
75%
Riverquode information and reviews
Riverquode
75%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.