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Dollar ahead of Fed meeting

March 15, 2023

EUR/USD: The euro is trading around 1.0750 against the U.S. dollar. The traders are now focused on the U.S. inflation data. The consumer price index fell from 6.4% to 6% on an annual basis. The core index slowed down from 5.6% to 5.5%. Also, investors are watching the next move of the Federal Reserve and its monetary policy, which is now uncertain due to the recent banking crisis. Experts disagree about how the regulator will act in a new situation. Most of them still believe that officials will continue with a long-term interest rate hike, but refuse to raise the rate by 50 basis points. Thus, the prospect of less aggressive monetary tightening could support risky assets and help the euro recover above 1.08.

BUY STOP 1.0750/TP 1.0820/SL 1.0720


USD/JPY: In the absence of significant economic releases, the movement of the yen is generally driven by external factors. It is worth paying attention to the recent comments of Japanese officials, according to which the bankruptcy of the American Silicon Valley Bank will not have a negative impact on the national economy. Thus, Japanese Minister of Economy Goto said that the government is watching the development of the American banking crisis, but does not expect serious damage from it. A similar opinion was expressed by Finance Minister Suzuki, who noted that the Japanese financial system is now stable. Additional support for the yen may come from the local weakness of the dollar against the backdrop of revised expectations of the pace of further rate hikes by the Fed.

SELL STOP 134.30/TP 133.50/SL 134.60


WTI: The decline in oil continues. Pressure on quotes comes from concerns about the U.S. financial crisis, which could have severe consequences for the global economy and cause a reduction in demand for petroleum products. Among the positive news is the upward revision of OPEC oil demand outlook for China. Now, cartel analysts expect that the Chinese economy will consume on average 710 thousand barrels of oil per day during the year instead of 590 thousand barrels, as previously thought. During the day, investors also expect the publication of data on oil reserves in the US. In the event of another increase in inventories, oil will be heading for new lows.

SELL STOP 72.00/TP 70.00/SL 72.50