The Federal Reserve maintains its expectation of interest rate cuts unchanged, and the US dollar saw a significant decline on Wednesday Gold surged over $60, reaching a new historical high
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Market Review | March 21, 2024
Fed Chair dovish statement indicated a commitment to rate cuts later this year, despite recent signs of inflationary pressure, exerted downward pressure on the dollar index (DXY), which declined by as much as 0.6%
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WCG Markets:2024-03-21
In the forex market, the U.S. dollar demonstrated strength against its major counterparts, with the dollar index rising to 103.82. The significant movement included the USD/JPY pair, which saw an increase of 174 pips to 150.88, following the Bank of Japan's announcement to end its negative-interest-rate policy, marking its first rate hike in 17 years and concluding eight years of this monetary approach.
On Tuesday, due to US economic data indicating persistent inflation, expectations for interest rate cuts were dampened. The US dollar index opened low but went higher, closing up 0.22% at 103.80. The yield on the benchmark 10-year US Treasury note closed at 4.2910%, and the yield on the 2-year US Treasury note, most sensitive to Fed policy rates, closed at 4.6970%.
On Tuesday (March 19th), due to US economic data indicating high inflation stickiness and suppressed expectations of interest rate cuts, the US dollar index opened lower and rose higher, ultimately closing up 0.22% at 103.80. The benchmark 10-year Treasury yield closed at 4.2910%, while the 2-year Treasury yield, which is most sensitive to the Federal Reserve's policy rate, closed at 4.6970%.
The Bank of Japan (BoJ) has concluded its era of negative interest rates with its first rate hike since 2007, simultaneously ending its yield curve control (YCC) policy.
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In the realm of foreign exchange, the U.S. dollar showcased strength against a basket of major currencies, with the dollar index reaching 103.60.
On Monday, with previously released US economic data showing improvement, the market bet on the reduced possibility of a Fed rate cut in June. The US dollar index opened lower but rose throughout the day, ultimately closing up by 0.13% at 103.58. The yield on the benchmark 10-year US Treasury note closed at 4.3250%, while the 2-year US Treasury yield, most sensitive to Fed policy rates, closed at 4.7360%.
On Monday (March 18th), as a result of the previously released US economic data, the market's bet on the possibility of the Federal Reserve cutting interest rates in June decreased. The US dollar index opened lower and rose higher, ultimately closing 0.13% higher at 103.58. The benchmark 10-year Treasury yield closed at 4.3250%, while the 2-year Treasury yield, which is most sensitive to the Federal Reserve's policy rate, closed at 4.7360%.
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