Mild market optimism pre-Fed meeting tomorrow, dollar mixed
Markets are mildly optimistic ahead of tomorrow’s Fed FOMC decision. Global stocks are slightly higher and near all-time highs in the US. Bond yields are soft, the dollar is mixed against its G-10 peers, gold prices are firm and oil is soft. Traders expect no change in the Fed’s interest rates, but will be closely following comments by Fed Chair Powell, who is expected to remain supportive of economic growth with rate hikes years away. The Fed will also provide an updated Summary of Economic Projections (SEP) and it’s closely watched “DOT plot.”
March 16, 2021
EUR/USD 1.1908 GBP/USD 1.3889 USD/CAD 1.2474 AUD/USD 0.7745 USD/JPY 108.8800 USD/CNH 6.5010 USD/ILS 3.2990 USD/MXN 20.5869 USD/CHF 0.9261 USD/INR 72.5500 USD/BRL 5.5781 USD/SGD 1.3454 USD/DKK 6.2435 USD/SEK 8.5266 USD/NOK 8.4784
The US dollar is mixed overnight, trading in relatively narrow ranges. The Japanese yen was the strongest currency vs. the dollar, the Norwegian krone the weakest. Markets await tomorrow’s Fed meeting. Large currency speculators remain positioned well short the US dollar.GBP
After an initial sell-off of the UK pound last night, it has rallied and is now barely changed from yesterday’s close. Traders await the Bank of England decision on Thursday – it is expected to leave its monetary policy unchanged.EUR
After an initial rally last night, the euro sold off and now sits virtually unchanged from yesterday’s close. Release of the closely-followed ZEW Economic Confidence showed better-than-expected sentiment in March regarding the economic development of the eurozone.CAD
The Canadian dollar was steady overnight, not far from yesterday’s three-year low in the USD/CAD. The currency pair continues to trade under 1.25, but it's technically oversold and large currency speculators are positioned heavily net long Canadian dollars.ASIA/PACIFIC
The Japanese yen is the top performing currency overnight, the USD/JPY falling hard after topping out at 109.36 yesterday. Traders were seen unwinding short yen (long USD/JPY) positions for the first time in weeks.
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