EUR/USD, GBP/USD, AUD/USD, USD/JPY – U.S. Dollar Remains Under Pressure As Traders Prepare For Fed Decision

Key Insights

• U.S. dollar tests new lows as demand for safe-haven assets declines. 
• EUR/USD gains ground despite weak ZEW Economic Sentiment Index report. 
• USD/JPY rebounds as Treasury yields move higher. 

U.S. Dollar

U.S. dollar tests new lows as appetite for risk continues to grow. Existing Home Sales increased by 14.5% in February, indicating that the housing market may have started to rebound.

U.S. Treasury Secretary Janet Yellen has recently said that the U.S. could provide support to other banks if they suffer deposit runs that pose the risk of contagion. At this point, it looks that U.S. officials managed to calm markets, which was bearish for the U.S. dollar as demand for safe-haven assets declined.

EUR/USD

EUR/USD moved towards the 1.0780 level despie weak ZEW Economic Sentiment Index report. The report indicated that Euro Area ZEW Economic Sentiment Index declined from 29.7 in February to 10 in March, compared to analyst consensus of 16. Traders are not worried about the weak report as they focus on the developments in the banking sector.

GBP/USD

GBP/USD pulled back towards the 1.2220 level as traders took profits after the recent move. Trading may stay choppy until tomorrow, when the Fed will release its Interest Rate Decision.

AUD/USD

AUD/USD declined towards the 0.6650 level as precious metals markets pulled back. Other commodity-related currencies have also found themselves under pressure in today’s trading session. NZD/USD pulled back below the 0.6200 level, while USD/CAD setled near 1.3725.

USD/JPY

USD/JPY rebounded towards the 132 level as Treasury yields continued to rebound from multi-month lows. USD/JPY will remain sensitive to the dynamics of Treasury yields due to the ultra-dovish policy of the BoJ.

For a look at all of today’s economic events, check out our economic calendar.