Forex news has been volatile throughout March 2024.
The US Dollar and Japanese Yen continue to dominate headlines in the currency market.
Explore uplifting Forex news updates that highlight the latest trends, wins, and powerful insights shaping the global currency markets today.
Forex news – Market Snapshot
US stocks fell at the start of a holiday-shortened week, in line with losses in international markets, as investors repositioned before key inflation data.
The critical US stock indexes opened down modestly.
Big technology stocks led the decline of the Nasdaq, which tends to be heavily affected by the fall of tech.
Forex News – US Dollar vs Yen
The US dollar weakened after rhetoric about potentially targeting the yen’s value following Japan’s Prime Minister Kishida’s offer of a wide-ranging security pact with the US, as well as a stop-gap intervention by the Bank of Japan to prop up the yen.
This could pose problems for the dollar amid a rally by the yuan, also known as the renminbi, supported by China’s Government.
Forex News – Boing Affects Markets
Investors kept an eye on Boeing Co after the American aerospace company announced that its CEO Dave Calhoun would resign at the end of 2024.
Forex Markets Brace for Impact: Central Bank Meetings & World Bank’s $6 Billion Pledge to Egypt
This comes nearly two years after he took charge in 2019, sparking hopes the company would overcome two deadly aircraft crashes over a five-month period that ultimately led to a two-year-plus grounding of its wide-body MAX aircraft.
Forex News – Federal Reserve Decision
In the wake of the Federal Reserve’s decision on March 27 to keep its key policy rate steady and to signal three rate cuts this year, traders are now turning towards the next Personal Consumption Expenditures (PCE) report.
Economists expect the February release of PCE to reveal a higher level of inflation, with core PCE, which excludes food and energy, expected to record a dip.
Forex News – Dow Jones, S&P500, Nasdaq
The Dow Jones, the S&P 500, and the Nasdaq all fell; although European stocks closed flat after hitting new highs, with trading propelled by a softer tone from the world’s big central banks.
The European STOXX 600 nudged higher but the global and emerging market stock indexes suffered modest losses.
Forex News – Dollar Weakens Against Asian Currencies
The dollar weakened against the yen and the yuan strengthened.
A great deal of exchange-rate movements were linked to attempts by China and Japan to strengthen their aggregate economies, which have been struggling.
In the meantime, other currencies have also “shifted”, nevertheless – the euro and sterling against the US dollar are the most noteworthy examples.
On the Blockchain, the price continued to climb, exceeding the 10D MA.
Forex News – US Treasury Yields
US Treasury yields saw a modest rise as investors geared up to digest a hefty sale of government debt.
Brent crude oil moved higher as geopolitics shaved off supply.
The gold price also ticked higher as investors eyed some key US economic data.
Forex News – Yuan climbs
The yuan climbed on March 25 after the newly appointed governor of Japan’s central bank, Haruhiko Kuroda, warned speculators not to try to force yen devaluation.
At the same time, the yuan rose after traders speculated that Chinese state-owned banks were selling dollars.
The greenback slid against nearly every major currency on Monday, retrenching from Friday’s one-month high.
Forex News – Yen loses to Dollar
Following a month in which the yen lost more than 8% of its value against the dollar, Kanda, the Japanese Vice Finance Minister for International Affairs, said that the widely-discussed weakening of its currency ‘does not reflect conditions on the ground’.
For those who closely follow the international currency markets, Kanda’s statement was an alarm.
It was a clear warning to traders that the Japanese could be preparing to interfere on the currency markets to limit the yen’s fall.
The dollar dipped to 151.26 yen, near a four-month high.
Forex News – US Dollar Nears All-time Lows
With the dollar close to the Oct 2022 all-time low, traders are watching for intervention signals.
While the yield on the Japanese benchmark bond rose only 3 bps to 0.21% – underscoring the degree to which Tokyo’s monetary mavericks remain on their own island – the yen dropped.
Even more dramatically, the yuan climbed in the offshore market on March 23, recovering from four months of losses to close near its top level of the day on robust central bank guidance, and benefiting from a dollop of dollar selling by state banks.
Forex News – US Economy Stimulus
With more stimulus expected for its economy, sentiment on the yuan has slipped.
There was a little softness for the dollar index though as Fed chair Jerome Powell reiterated that they expected the rate cuts this year would be data-dependent, even if inflation remains high, despite what some Fed officials such as Raphael Bostic say.
Traders are also looking ahead to the release of the personal consumption expenditure (PCE) price index, which could help them price in future Federal Reserve action.
The Good Friday holiday could also influence trading volume.
Forex News – Euro & Pound in Focus
The euro and sterling rose against the dollar. Eurozone and UK rate cuts might be coming – what if the BoE was right all along?
On the back of rate cuts by other central banks, as well as comments from the Bank of England’s (BoE’s) governor Andrew Bailey, rate-cut expectations have risen for the European Central Bank and the Bank of England.
Also in currency news, the Australian dollar was up, and Bitcoin also rose – though it is still some distance away from its record high earlier this March.
Forex News – Bank of Sweden
A survey of analysts by Reuters on Monday predicted that Sweden’s central bank would keep its interest rate at 4.00% this week and finally begin to cut the rate next month if inflation continued to drift back to the central bank’s 2% target.
The anticipated decision comes after two years of rapid interest rate rises and two years of rapid falls.
This is as the country’s economy tipped between threatening higher inflation with stagnant growth and jobs and cutting inflation amid recession and higher unemployment.
Forex News –
All 17 of the analysts expect the policy rate to be held at zero percent on 27 March and, while a majority anticipate a cut to be announced in either May or June, around 30% believe it will be held.
The divide pits economists calling for easing to start in June, with 10 picking that point, versus those seeing a May start, picked by seven.
A cut now would be the Riksbank’s first easing since it took the policy rate to an all-time low of -0.50% in early 2016.
Forex News – Russian invasion pushed up inflation
Borrowing costs stayed at the zero bound or below until 2022, when Russia’s invasion of Ukraine pushed up inflation and forced the central bank to sharply raise rates.
Then in February, the Riksbank said it thought interest rates had up for the meantime and raised the possibility of easing policy in the first half of the year (which households with mortgage bills three times higher than two years ago will doubtless welcome).
Even so, the Swedes are anything but obstreperous: the central bank is wary, especially of a weakening Swedish krona, as a shock last week shows when the Swiss National Bank abruptly slashed interest rates, driving the franc down against the euro.
Hoping to avoid a fate similar to that of the krona, the Riksbank has hinted at coordinating policy moves more closely with those of the Federal Reserve and the European Central Bank, both of which are preparing themselves to cut rates in June.
Forex News – Growth sluggish, wages growing
With inflation still subdued, growth sluggish, and wages still growing at a moderate pace, analysts believe that easing has a long way to go once it has started.
The median forecast sees the policy rate down to 3.00% by the end of 2024 and a further three-quarter of a percentage point lower by the end of 2025.
The pound was steady to lower in Europe on Monday, hovering close to last week’s one-month low, amid mounting investor bets that the Bank of England will cut interest rates in June.
Sterling was unchanged at $1.2608, just above Friday’s one-month trough of $1.2576.
The euro was steady against sterling at 85.79 pence, just off its two-month high of 86.02 pence hit on Friday.
Forex News – Dollar Slips Against Pound
The pound slid against the dollar about 1% last week as a result of the BoE keeping interest rates at 5.25% on Thursday and the follow-up comments by Governor Andrew Bailey that the path of inflation was accommodating to a potential cut in rates.
Bailey’s additional comment to the Financial Times on Friday that a rate cut was in the cards within a year added to the pound’s decline.
As speculation mounted further, market traders now put the chance of a BoE rate cut by June at near 75%, up from about 35% at the start of the previous week, after new data showed inflation was falling faster than expected.
Forex News: US Economy Better Than Expected
Instead, US economic and inflation numbers have been better than expected, prompting investors to pull back on bets about a Fed rate cut in June.
The prospect for lower and steadier interest rates in the US has bolstered US bonds and helped the dollar.
Meanwhile, the dollar index was almost unchanged at 104.38 on Monday, after a 1% increase last week.
The Russian rouble hit a nine-day low of under 93 against the dollar on Monday as Russian markets opened for business after the lethal explosion outside Moscow on Friday evening.
A rising oil price and coming end-of-the-month tax payments at least offered some support, but the Russian currency did look shaky.
On Saturday, Russia declared two days of mourning after a concert outside Moscow that authorities called the ‘most serious terrorist act in Russia in the last 20 years’ killed more than 30 and injured another 100.
The country pinned the shooting on four suspects, arrested so far, and promised to support the families of the victims.
The rouble was steady at 92.81 to the dollar by 0730 GMT after hitting a one-week low during the morning, slipping 0.1% to 100.36 to the euro and shedding 0.3% against the yuan to 12.78.
Investors were also absorbing the Bank of Russia’s decision to keep the interest rate at 16% on Friday, and signaling that it still sees rising inflationary pressures, intending to maintain monetary policy tight until it hits its 4% inflation target.
Meanwhile, Brent crude oil – the global standard for Russia’s main export – jumped 0.4% to $85.76 a barrel.
The rouble will get some support this week from month-end tax payments when exporters buy roubles to repay domestically denominated obligations.
The dollar fell barely more than 0.1% to 43.7283 yen, despite a number of events on Tuesday.
Japan and the City of London were just two of the major financial centres affected by half an hour of outages as voyages through cyberspace were dropped midstream.
Amsterdam’s exchange of equity options also broke down and stock, currency, futures and gold markets were thrown into turmoil by more than a minute of electronic mayhem.
By Wednesday, traders, frustrated by power shortages and technical breakdowns, had cleared $1 billion in US dollar futures orders without a cycle.
Brokers were confounded by special sessions that shrunk trading times until New York markets finally closed at their coup de grâce.
On the equity market meanwhile, Russian indexes fell.
The dollar-denominated RTS index lost 0.5% to 1,107.0 points, and the rouble-based MOEX Russian index dropped 0.4% to 3,259.5 points.
