 Dollar remains under pressure as markets await FOMC rate decision and, more crucially, the updated economic projections. While the central bank is widely expected to hold rates steady at 4.25-4.50%, traders are looking for any signs that Fed officials are adjusting their outlook in response to mounting trade tensions. Meanwhile, US stocks saw another selloff overnight, led by the tech sector, though major indexes have so far held above last week’s lows. Sentiment remains fragile, and any dovish elements in Fed’s projections could trigger another round of risk aversion and Dollar weakness. However, the biggest market move may be on hold until April 2, when the final decision on reciprocal tariffs is expected. Japanese Yen is also soft in a tight range after BoJ left monetary policy unchanged earlier today. While this decision was widely anticipated, some market participants noted that the earlier-than-usual timing of the announcement suggested that the BoJ was not yet ready to accelerate rate hikes. Yen has also weakened this week on broader risk-on sentiment in Asia, despite the selloff in US equities. On the other hand, Euro remains firm, though lacking decisive upside momentum. Germany’s parliament approved the massive fiscal expansion plan yesterday, marking a historic departure from the country’s long-standing fiscal conservatism. This move has given CDU/CSU leader Friedrich Merz a significant political boost as he continues talks with the Social Democrats to form a centrist coalition government. While some economists argue that Germany’s fiscal expansion is the most significant since reunification, they also warned that structural reforms will be necessary to turn this spending into sustainable growth..... |
