Here is what you need to know on Wednesday, March 16:
Risk flows dominate the financial markets early Wednesday as investors remain hopeful for a diplomatic solution to the Russia-Ukraine crisis and the greenback stays on the back foot. February Retail Sales and Import Price Index data will be featured in the US economic docket ahead of the Federal Reserve's all-important interest rate decision. Consumer Price Index (CPI) data from Canada will be looked upon for fresh impetus as well. Additionally, negotiations between Russian and Ukrainian representatives are set to continue on Wednesday.
US Retail Sales Preview: Relentless shopper may provide dollar-selling opportunity ahead of the Fed.
Russian President Vladimir Putin said on Tuesday that Kyiv was not serious about finding a mutually acceptable solution to the conflict. Although this headline caused investors to turn cautious during the American trading hours, Wall Street's main indexes managed to post decisive daily gains. Mykhailo Podoliyak, one of the Ukrainian representatives, said that there certainly was room for a compromise. Moreover, Ukrainian President Volodymyr Zelenskyy noted in a video statement that negotiations were already sounding more realistic.
Reflecting the risk-positive market atmosphere, China's Shanghai Composite Index gained more than 3% and Japan's Nikkei 225 Index rose 1.6%. In the early European session, US stock index futures are up between 0.3% and 0.8%.
Later in the day, the Fed is widely expected to hike its policy rate by 25 basis points. Investors will pay close attention to the updated Summary of Economic Projections and FOMC Chairman Jerome Powell's comments on the policy outlook.
Fed Interest Rate Decision Preview: Is history a guide?
EUR/USD failed to hold above 1.1000 on Tuesday and ended up closing the day virtually unchanged at 1.0950. The pair stays relatively quiet below 1.1000 early Wednesday.
GBP/USD closed the second straight day in positive territory on Tuesday despite losing its bullish momentum near 1.3100. The pair is moving sideways near the mid-1.3000s in the early European morning.
After losing nearly 2% on Monday, gold fell 1.5% on Tuesday and touched its lowest level in two weeks below $1,910. XAU/USD is consolidating its losses above $1,910 as US Treasury bond yields move sideways.
USD/JPY clings to weekly gains above 118.00 as the JPY struggles to find demand as a safe haven. Kyodo news agency reported earlier in the day that the Japanese government was considering compiling a fresh economic package amid the Russia-Ukraine crisis.
Bitcoin spiked to a six-day high above $41,700 earlier in the day but returned below $40,000. Ethereum is edging higher after posting gains in the previous two days and was last seen rising 1% on the day above $2,600.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD on the defensive around 1.0400 after upbeat US data
EUR/USD is under mild selling pressure around the 1.0400 mark following the release of upbeat United States data. Q3 GDP was upwardly revised to 3.1% from 2.8% previously, while weekly unemployment claims improved to 220K in the week ending December 13.
GBP/USD struggles around 1.2600 after BoE rate decision
GBP/USD retreated from its daily peak and battles around 1.2600 following the Bank of England monetary policy decision. The BoE kept the benchmark interest rate unchanged at 4.75% as expected, but the accompanying statement leaned to dovish. Three out of nine MPC members opted for a cut.
Gold price resumes slide, pierces the $2,600 level
Gold resumes its decline after the early advance and trades below $2,600 early in the American session. Stronger than anticipated US data and recent central banks' outcomes fuel demand for the US Dollar. XAU/USD nears its weekly low at $2,582.93.
Aave Price Forecast: Poised for double-digit correction as holders book profit
Aave (AAVE) price hovers around $343 on Thursday after correcting more than 6% this week. The recent downturn has led to $5.13 million in total liquidations, 84% of which were from long positions.
Fed-ECB: 2025, the great decoupling?
The year 2024 was marked by further progress in disinflation in both the United States and the Eurozone, sufficient to pave the way for rate cuts. The Fed and the ECB did not quite follow the same timetable and tempo, but by the end of the year, the cumulative size of their rate cuts is the same: 100 basis points.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.