News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • The US Dollar seems to be back on the offensive against its major counterparts, pressuring EUR/USD and NZD/USD lower as USD/JPY consolidates. USD/CHF surges past key resistance. Get your market update from @ddubrovskyFX here:
  • Chinese estates' Evergrande loss assumes all shares sold -BBG #Evergrande
  • RT @FxWestwater: Australian Dollar Fights FOMC-Charged US Dollar After Upbeat PMI Data Link: $AUDUSD…
  • Heads Up:🇯🇵 Foreign Bond Investment (18/SEP) due at 23:50 GMT (15min)
  • Gold prices gain as potential systemic risks out of China's Evergrande Group roil broader markets. Meanwhile, iron ore is ticking higher after a big drop on Monday as China steps up steelmaking curbs. Get your market update from @FxWestwater here:
  • #ASEAN based #USD index continues to extend the bounce off September lows post #FOMC This follows a test of the 100-day SMA as well as a rising trendline from June Eyes on the 38.2% Fib extension before potentially retesting the July/August highs
  • 🇦🇺 Markit Manufacturing PMI Flash (SEP) Actual: 57.3 Previous: 52
  • 🇦🇺 Markit Services PMI Flash (SEP) Actual: 44.9 Previous: 42.9
  • Heads Up:🇦🇺 Markit Manufacturing PMI Flash (SEP) due at 23:00 GMT (15min) Previous: 52
  • Heads Up:🇦🇺 Markit Services PMI Flash (SEP) due at 23:00 GMT (15min) Previous: 42.9
US Dollar Whipsaws Around March FOMC Decision - No Direction

US Dollar Whipsaws Around March FOMC Decision - No Direction

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- FOMC raises benchmark interest rate to range of 1.50-1.75%, as was expected by markets (Fed funds futures were pricing in a 100% chance pre-meeting).

- Near-term Fed interest rate glide path remains unchanged from each of the past five meetings: two more 25-bps hikes (for three total) are anticipated in 2018.

- US Dollar produces mixed reaction, with the DXY Index trading lower ahead of newly-minted Fed Chair Jerome Powell’s first press conference.

See our longer-term forecasts for the US Dollar, Euro, British Pound, and other major currencies with the DailyFX Trading Guides.

The Federal Open Market Committee did what was widely expected of them today when they announced a 25-bps hike to the main overnight benchmark rate into a range of 1.50-1.75%, as was priced into the market well in advance of today’s policy meeting. The trifecta of improved growth prospects, stable inflation expectations around the medium-term target of +2%, and consistent strength in the labor market made it an easy decision for the FOMC at the first meeting helmed by Jerome Powell.

Looking at the summary of economic projections (SEP) and ‘dot plot,’ commentary from the initial FOMC statement suggests that policymakers are more optimistic on the US economy. Policymakers expect “Inflation on a 12month basis is expected to move up in coming months and to stabilize around the Committee’s 2 percent objective over the medium term.

It would appear that inflation could also undercut the Fed’s best laid plans to raise rates two more times this year: “Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

Overall, the FOMC saw the median Fed funds rate at 2.1% at the end of 2018, as they have at the past five FOMC meetings. Likewise, they saw the median Fed funds rate at 2.9% at the end of 2019, up from 2.7% in December 2017. Finally, the median Fed funds rate for the end of 2020 was revised up to 3.4% from 3.1%.

In sum, today’s statement can be seen as slightly hawkish than what markets were pricing in ahead of time, given the outlook for two more hikes this year and three for 2019. However, given the balance of risks, the initial decision appears to be a wash for the US Dollar – neither good nor bad.

Here are the Fed’s new forecasts:

US Dollar Whipsaws Around March FOMC Decision - No DirectionUS Dollar Whipsaws Around March FOMC Decision - No Direction

Here is the Fed’s new dot plot:

US Dollar Whipsaws Around March FOMC Decision - No Direction

See the DailyFX economic calendar for Wednesday, March 21, 2018

Price Chart 1: DXY Index 1-minute Chart (March 21, 2018 Intraday)

US Dollar Whipsaws Around March FOMC Decision - No Direction

Immediately following the data, the US Dollar slipped back versus the Euro and the Japanese Yen, with the Dollar Index (DXY) dropping from 90.13 ahead of the FOMC decision to as low as 89.86. The DXY Index was trading at 89.96 at the time this report was written.

Fed Chair Jerome Powell begins speak at 14:30 EDT/18:30 GMT; his Q&A should prove more market moving than the initial statement release. Follow the commentary in the DailyFX Real Time News feed.

Read more: DXY Index Trades Sideways into March FOMC Meeting - What to Expect


Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.