The US Dollar gained early Wednesday ahead of the Federal Reserve’s interest rate decision, with traders positioned for possible guidance shifts despite expectations the Fed will hold at 4.5%.
Today’s Currency Moves
- EUR/USD is flat at 1.1368, with little reaction to weak Eurozone retail sales.
- GBP/USD slipped 0.09% to 1.3353 as traders remain cautious.
- USD/JPY rose 0.69%, pushing back above 143.30, as rate differentials widened.
- AUD and NZD both weakened slightly, down 0.22% and 0.10%, respectively.
Key Drivers Today
Eurozone Retail Sales Disappoint
Eurozone retail sales for March came in below expectations:
- MoM: 0.0% (vs 0.3% prior)
- YoY: 1.6% (vs 2.3% prior)
This suggests weakening household demand, putting pressure on the Euro and reducing expectations for ECB tightening.
All Eyes on the Fed
The US Dollar strengthened modestly ahead of the 18:00 UK time Fed statement.
Markets are not expecting a rate hike, but any signs of hawkish language in the FOMC statement or Powell’s press conference could trigger USD volatility.
JPY Watching BoJ Minutes
Later tonight, Japan releases BoJ monetary policy minutes, which could influence JPY sentiment heading into Thursday.
Currency Watch – Latest Snapshot
| Pair | Price | Daily Change |
|---|---|---|
| EUR/USD | 1.1368 | ▼ 0.01% |
| GBP/USD | 1.3353 | ▼ 0.09% |
| AUD/USD | 0.6480 | ▼ 0.22% |
| NZD/USD | 0.6002 | ▼ 0.10% |
| USD/JPY | 143.39 | ▲ 0.69% |
| USD/CHF | 0.8256 | ▲ 0.40% |
| USD/CAD | 1.3785 | ▲ 0.05% |
Looking Ahead
Expect low volatility until the Fed’s announcement. Markets may reprice USD pairs sharply depending on tone and projections.
The BoJ minutes could also weigh on the Yen overnight.