Forex News
DBS Group Research economist Philip Wee notes that the Federal Reserve (Fed) kept the Fed Funds Rate at 3.50-3.75%, delivering what he characterizes as a hawkish hold. He highlights that this stance has given the Dollar only a temporary anchor, as markets remain volatile.
Fed stance and Dollar reaction assessed
"The FOMC’s decision to maintain the Fed Funds Rate at 3.50-3.75% met broad market expectations."
"However, the decision also came across as a hawkish hold from the near-unanimous 11-1 vote to keep the current restrictive stance, the updated Summary of Economic Projections (SEP), which raised the GDP growth and PCE inflation forecasts, and the higher-than-expected PPI readings before the meeting. "
"Fed Chair Powell emphasized the Fed’s priority of ensuring no repeat of a de-anchoring of inflation expectations."
"While the FOMC’s hawkish stance has provided a momentary anchor for the USD, we remain wary of assuming this marks a definitive trend, given the market’s persistent tendency to oscillate from event to event amid heightened geopolitical uncertainty."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
TD Securities strategists Alex Loo and Prashant Newnaha warn that JPY intervention risks are elevated as USD/JPY trades near 160, close to its 2024 high before Ministry of Finance action. They flag the upcoming Japan holiday, thin liquidity, and the Trump–Takaichi summit as catalysts for potential joint US–Japan action, though they doubt such moves would reverse the broader Dollar uptrend against the Japanese Yen.
TD flags elevated JPY intervention risk
"Japan starts a 3-day long weekend tomorrow but investors are on high alert given current USDJPY levels and the Trump-Takaichi summit in the US."
"JPY intervention risks are high again as USDJPY hovers around the 160 level, close to the 162 high in 2024 before MoF's intervention. Joint intervention from both US and Japan authorities is possible, exploiting thin liquidity conditions during the Japan holiday tomorrow. The last joint intervention was in 1998 and we could see USDJPY drop by ~5 to 6 big figures."
"Joint/unilateral interventions may help to fend off speculators, but we doubt it would be successful in reversing the upward trajectory in USDJPY now. USDJPY is tracking alongside the uptick in US yields and the move in oil, with any spikes in oil likely after the hits to oil infrastructure in the Middle East yesterday."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The Swiss National Bank (SNB) holds interest rates steady at 0%, as expected. Now investors await Chairman Martin Schlegel's upcoming press conference at 09:00 GMT, where they will be looking for fresh cues on the monetary policy outlook.
SNB's monetary statement highlights
SNB sees 2026 inflation at 0.5% (previous forecast was for 0.3%
SNB sees Q4 2028 inflation at 0.7%.
Excessive Franc rise would jeopardise price stability.
With the conflict in the Middle East, the economic outlook has become considerably more uncertain.
Inflation is likely to increase more strongly in the next quarters.
Market reaction
The initial reaction of the Swiss Franc (CHF) after the SNB's interest rate decision is negative. As of writing, USD/CHF trades 0.1% lower to near 0.7925, but is close to its Wednesday's high.
SNB FAQs
The Swiss National Bank (SNB) is the country’s central bank. As an independent central bank, its mandate is to ensure price stability in the medium and long term. To ensure price stability, the SNB aims to maintain appropriate monetary conditions, which are determined by the interest rate level and exchange rates. For the SNB, price stability means a rise in the Swiss Consumer Price Index (CPI) of less than 2% per year.
The Swiss National Bank (SNB) Governing Board decides the appropriate level of its policy rate according to its price stability objective. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame excessive price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Yes. The Swiss National Bank (SNB) has regularly intervened in the foreign exchange market in order to avoid the Swiss Franc (CHF) appreciating too much against other currencies. A strong CHF hurts the competitiveness of the country’s powerful export sector. Between 2011 and 2015, the SNB implemented a peg to the Euro to limit the CHF advance against it. The bank intervenes in the market using its hefty foreign exchange reserves, usually by buying foreign currencies such as the US Dollar or the Euro. During episodes of high inflation, particularly due to energy, the SNB refrains from intervening markets as a strong CHF makes energy imports cheaper, cushioning the price shock for Swiss households and businesses.
The SNB meets once a quarter – in March, June, September and December – to conduct its monetary policy assessment. Each of these assessments results in a monetary policy decision and the publication of a medium-term inflation forecast.
ING’s Francesco Pesole argues that recent mixed signals from global central banks will likely encourage the ECB to avoid firm guidance, especially given its sensitivity to Oil after 2022. With around 55bp of hawkish repricing in one-year ECB expectations, ING sees dovish risks for Euro rates and expects EUR/USD could trade back close to 1.140 by week’s end.
ECB repricing points to downside risks
"The four G10 central banks that have met so far this week have sent mixed signals to the ECB. The Reserve Bank of Australia has brought forward a cut that appeared scheduled for May, the Bank of Canada stated that it is looking through the inflation bump, the Fed kept its projections for one more 2026 cut unchanged, and the BoJ tried to sound cautiously hawkish."
"The ECB has a history of a relationship with oil prices, and the memory of the 2022 inflation scares are likely still vivid. But for several reasons, this is not a 2022 rerun, in our view, and we think it’s quite plausible that President Lagarde will use cautious, non-committal language like Powell."
"Still, the 55bp hawkish repricing in one-year ECB rate expectations in March means even subtle hints can have an amplified impact on short-term rates. And it’s exactly the size of that repricing that makes us think risks are on the dovish side today: matching current pricing would require some degree of guidance that we doubt the ECB is prepared to offer yet."
"This translates to some downside risks for the euro, but remember that FX has lost sensitivity to rate differentials as oil prices have taken over the overwhelmingly dominant driver. In other words, the euro didn’t benefit from the hawkish repricing, and it shouldn’t suffer too much from a dovish re-adjustment. Still, we could be trading back close to 1.140 before the end of the week."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold attracts heavy selling following a modest intraday uptick and dives to a fresh one-month low.
- The Fed’s hawkish outlook acts as a tailwind for the USD and undermines the non-yielding bullion.
- Geopolitical uncertainties may support the safe-haven XAU/USD pair and help limit further losses.
Gold (XAU/USD) dives to a fresh low since February 6 during the first half of the European session on Thursday, though it finds some support near the $4,700 round figure. The US Dollar (USD) preserves the previous day's strong gains fueled by the US Federal Reserve's (Fed) hawkish outlook, which, in turn, is seen as a key factor undermining the non-yielding yellow metal. However, heightened geopolitical uncertainties could offer some support to the safe-haven bullion and help limit further losses.
Data published by the US Labor Department on Wednesday showed that the headline Producer Price Index (PPI) rose 0.7% in February, following a 0.5% increase in the previous month. Adding to this, the yearly rate jumped to 3.4%, marking the largest 12-month advance since February 2025. Moreover, the US central bank raised the year-end inflation outlook (PCE), citing risks from higher energy prices due to the Iran war. The Fed also upgraded its 2026 growth projection and projected only one rate reduction this year, and one in 2027. This, in turn, favors the USD bulls and should keep a lid on the attempted recovery in the Gold price.
Meanwhile, energy infrastructure in Persian Gulf countries came under attack today following Israeli strikes on Iran’s South Pars natural gas field – the world’s largest. In response, US President Donald Trump issued a stark warning of potential large-scale retaliation tied to energy infrastructure. Adding to this, the Trump administration is reportedly exploring options to expand its military campaign against Iran and is considering deploying thousands of US troops to reinforce its operation in West Asia. This marks a significant escalation in the conflict and continues to weigh on investors' sentiment, which could support the traditional safe-haven Gold.
Traders might also opt to wait for more policy updates from the Swiss National Bank (SNB), the Bank of England (BoE), and the European Central Bank (ECB), which should infuse volatility in the financial markets. Apart from this, the US economic data – the usual Weekly Initial Jobless Claims and the Philly Fed Manufacturing Index – might provide some impetus to the Gold price. Nevertheless, the fundamental backdrop warrants some caution before confirming that the XAU/USD pair has formed a near-term bottom and is positioning for any meaningful recovery.
(This story was corrected on March 19 at 09:02 to say that the previous month's headline PPI reading was 0.5%, not 0.3%.)
XAU/USD 4-hour chart
Gold seems vulnerable below 61.8% Fibo. support breakpoint near $4,800
Last Friday's breakdown below the $5,040-$5,035 confluence – comprising the 200-period Exponential Moving Average (EMA) on the 4-hour chart and the 38.2% Fibonacci retracement level of the February-March move higher – was seen as a key trigger for the XAU/USD bears. Moreover, the Moving Average Convergence Divergence (MACD) histogram has turned negative again with the line slipping below the signal line under the zero mark, suggesting renewed downside momentum after a brief pause.
Meanwhile, the Relative Strength Index (RSI) at 27.86 stays below 30, showing oversold conditions, yet the persistent weakness favors selling pressure over a meaningful rebound for now. Hence, any further move up is likely to confront resistance at the $4,919.61 area, where the 50.0% retracement level aligns as the first cap on recovery attempts. This is followed by the 38.2% Fibo. retracement at $5,037.25 near the 200-period EMA, reinforcing a stronger barrier if prices bounce.
On the downside, the recent trough around $4,843 becomes initial support, ahead of the $4,801.97 level at the 61.8% retracement, which would be the next bearish objective if sellers extend their control. A clear break below $4,801.97 would expose the broader $4,634.48 support at the 78.6% retracement, where oversold readings could encourage profit-taking on short positions.
(The technical analysis of this story was written with the help of an AI tool.)
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
- Dow Jones futures move little after a sharp Wall Street sell-off driven by inflation concerns.
- Traders turn cautious amid a more hawkish shift in the US Federal Reserve’s policy outlook.
- The Fed flagged uncertainty over the Iran war’s economic impact.
Dow Jones and S&P 500 futures are steady around 46,530 and 6,670, respectively, during European hours on Thursday, ahead of the US cash market open. Meanwhile, Nasdaq 100 futures edge lower by 0.17% to hover near 24,600 at the time of writing.
US stock futures moved slightly lower on Thursday, following a sharp sell-off in the previous session as inflation worries weighed on Wall Street. On Wednesday, the Dow Jones Industrial Average fell 1.63% to its lowest level since November, while the S&P 500 and Nasdaq Composite dropped 1.36% and 1.46%, respectively.
Market sentiment grew cautious amid a more hawkish shift in the US Federal Reserve’s policy outlook. The Fed kept interest rates unchanged at 3.50%–3.75% at its March meeting. Fed Chair Jerome Powell said inflation is still expected to ease gradually, but the pace of disinflation could be slower than previously anticipated. Powell also warned that rising oil prices linked to the Iran conflict may add near-term upward pressure on inflation.
The Fed flagged uncertainty over the economic impact of the Iran war while highlighting elevated upside risks to inflation. Policymakers indicated that rate cuts will likely be delayed until there is clearer evidence of easing price pressures, though projections still suggest one cut this year and another in 2027, consistent with the December outlook.
Meanwhile, data released Wednesday showed US producer prices rose more than expected in February, reinforcing persistent inflationary pressures beyond energy. The Producer Price Index (PPI) increased 0.7% MoM, up from 0.5% in January and well above expectations of 0.3%, marking the largest gain in seven months. On a YoY basis, headline PPI rose to 3.4%, while Core PPI accelerated to 3.9% from 3.5% previously. Investors now look ahead to weekly jobless claims for further insight into labor market conditions.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
Commerzbank’s Thu Lan Nguyen notes that the Dollar strengthened after the latest Fed meeting, driven by several smaller hawkish signals rather than a single major shift. Powell stressed that rate cuts depend on inflation moving toward target, while long-term expectations remain anchored. Markets feel vindicated in pricing fewer cuts as energy prices rise, supporting a stronger Dollar outlook.
Fed stance underpins Dollar resilience
"The US dollar gained ground following the Fed’s decision yesterday. The decisive factor was not one strong signal - after all, the statement was only slightly revised and the projections remained virtually unchanged - but rather a series of smaller ones."
"For instance, while the majority of FOMC members still expect an interest rate cut this year and next, Fed Chair Jay Powell emphasized during the press conference that any rate move ultimately depends on inflation trends. If there are no signs that inflation is moving toward the central bank’s target in the foreseeable future, rates would not be cut."
"While short-term expectations have risen significantly in light of the rise in oil prices, long-term expectations remain in line with the Fed’s inflation target. As long as this remains the case, the path to monetary policy easing should remain clear."
"This could indicate that it will not be easy for a future Fed Chair, Kevin Warsh, to shift the consensus toward significant interest rate cuts - especially if inflation remains elevated in the coming months."
"All in all, the market is likely to feel vindicated in its assessment of the Fed’s reaction function (i.e., fewer rate cuts due to higher energy prices) following yesterday’s slightly hawkish meeting."
"This means that the dollar will continue to appreciate for the time being if energy prices rise further. With the increasing risk of significant and prolonged supply disruptions in the wake of attacks on energy infrastructure in the Gulf region, the signs thus currently point to a strong dollar."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Pound Sterling is under pressure against its major peers, following the UK labor market data release.
- UK Average Earnings cool down, and the ILO Unemployment Rate remains steady in the quarter ending January.
- The Fed is expected to shift to an extended pause in the near term.
The Pound Sterling (GBP) trades lower against its major currency peers, but is 0.1% higher to near 1.3270 against the US Dollar (USD) during the European trading session on Thursday.
The British currency has come under pressure as softer-than-projected United Kingdom (UK) Average Earnings data for the three months ending in January has diminished fears of persistent inflationary pressures.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.02% | -0.33% | 0.05% | -0.02% | -0.17% | -0.12% | |
| EUR | 0.02% | -0.01% | -0.35% | 0.06% | -0.00% | -0.15% | -0.11% | |
| GBP | 0.02% | 0.01% | -0.32% | 0.08% | 0.00% | -0.14% | -0.11% | |
| JPY | 0.33% | 0.35% | 0.32% | 0.38% | 0.30% | 0.13% | 0.22% | |
| CAD | -0.05% | -0.06% | -0.08% | -0.38% | -0.06% | -0.23% | -0.18% | |
| AUD | 0.02% | 0.00% | -0.01% | -0.30% | 0.06% | -0.16% | -0.12% | |
| NZD | 0.17% | 0.15% | 0.14% | -0.13% | 0.23% | 0.16% | 0.03% | |
| CHF | 0.12% | 0.11% | 0.11% | -0.22% | 0.18% | 0.12% | -0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The Office for National Statistics (ONS) reported in the early European trade that Average Earnings Excluding Bonuses, a key measure of wage growth, has arrived lower at 3.8% Year-on-Year (YoY) against 4.0% estimates and the prior reading of 4.1%. The key wage growth measure, including bonuses, dropped to 3.9% YoY from 4.2% in the three months ending in December.
The ILO Unemployment Rate remained steady at 5.2%, while it was expected to come in higher at 5.3%.
Investors brace for more volatility in the Pound Sterling as the Bank of England (BoE) is scheduled to announce its monetary policy at 12:00 GMT. The BoE is expected to leave interest rates unchanged at 3.75%, with a 7-2 majority, as the spike in oil prices amid Middle East conflicts has prompted fears that the UK inflation won’t return to the central bank’s 2% target anytime soon.
Meanwhile, the US Dollar trades broadly firm as the Federal Reserve (Fed) signaled on Wednesday that interest rate cuts are unlikely in the near term, with progress in inflation towards the central bank’s 2% target stalling.
“If inflation progress stalls, rate cuts will not follow,” Fed Chair Jerome Powell said in the press conference after the central bank left interest rates unchanged in the range of 3.50%-3.75% for the second time in a row, as expected.
Economic Indicator
BoE Interest Rate Decision
The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.
Read more.Next release: Thu Mar 19, 2026 12:00
Frequency: Irregular
Consensus: 3.75%
Previous: 3.75%
Source: Bank of England
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