Daily Market Update

Buck dominates for now before Fed at 2PM

March 20, 2024

The U.S. Dollar is trading in stronger ranges all across the board ahead of the FOMC announcement and press conference this afternoon at 2PM.


The moves have not been wild as the volatility in FX remains relatively low. As investors and traders await, and hope, for a more dovish Fed, equities have been on the rise with the S&P 500 reaching another all-time high.

The Fed is expected to show their dot-plot, telegraphing their commitment, or lack thereof, to move towards easing in the next 12 months. It will also be important to understand their ongoing “quantitative tightening,” in which previously purchased sovereign bonds are allowed to expire and the $7.5-trillion balance sheet is being shrunk. Powell will have a pivotal time with the media, but we shall see if it sparks some swings for the Buck one way or the other. The time for guidance is now.

What to Watch Today…

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The Euro has dwindled slowly for the past few trade sessions coming off of a January-high reached earlier in the month. Currently, there is an event, the European Central Bank & its Watchers Conference, in which ECB President Christine Lagarde is supposed to give some remarks. Thus far, the discussions about policy and economic upheaval have not caused much of a reaction.

While Construction gauges were in the positive today, tomorrow we will get readings for March Purchasing Managers Index. A reading of 50.0 or above for the Composite shall bode well for Euro gaining prospects. We think the shared currency can mount a comeback. After the BOJ’s move, the Euro is at its strongest level over Yen since 2008 while also experiencing the same with the Swiss Franc pairing.


The Mexican Peso remains about 1.0% stronger over the Buck thus far in March and could see more appreciation after tomorrow’s central bank meeting announcement. “Banxico” will present their stance tomorrow and it could turn out in various ways. If officials make a cut and sound like another one is on the way, expect MXN to drop in value. However, if they make a “hawkish cut,” in which they explain there is no reason to accelerate easing and sound confident over the economy, MXN could remain at its strong levels.

On the other hand, if officials state their commitment to a “wait-and-see” approach and refuse to cut into their borrowing costs, MXN could really start rallying towards its best level since 2015, which we touched March 13th. Bank of England will also add to the already policy-packed week.


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