The US dollar surges and falls, the Federal Reserve maintains expectations of a year's interest rate cut

On March 20, early trading in the Asian market on Thursday, Beijing time, the US dollar index hovered around 103.36. On Wednesday, the US dollar index surged and fell, falling sharply after the Fed's interest rate resolution was announced, erasing most of the intraday gains and finally closed up 0.215% to 103.47. The yield on the U.S. Treasury plunged during the session, with the benchmark 10-year U.S. Treasury yield closing at 4.237%; the two-year U.S. Treasury yield that is more sensitive to monetary policy fell below 4%, closing at 3.993%. Spot gold rose for the third consecutive day and hit a new record high. During Powell's speech, it stood at the $3,050 mark and finally closed up 0.44% to $3,047.39 per ounce. Spot silver once again failed to challenge the 34 mark and fell into consolidation, finally closing down 0.68% to $33.79 per ounce. International oil prices rebounded as geopolitical risks in the Middle East warmed up again and U.S. government data showed fuel inventories decreased. WTI crude oil continued to rise after the release of EIA data, and finally closed up 0.72% to $67.02 per barrel; Brent crude oil recovered the 70 mark and closed up 0.71% to $70.56 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 103.36. The FOMC dot chart shows that in terms of interest rate cuts, the median forecast for 2025 was lowered to 3.375%, which is a signal that policies may be relaxed in response to slowing economic growth and rising inflation expectations. GDP forecasts have been lowered from 2.1% to 1.7% in 2025, while unemployment is currently expected to be 4.4%, indicating a weak labor market outlook. Technically, if the US dollar index remains at 103.64Above 50MA, it will move towards the nearest resistance range of 104.30–104.50.

Euro: As of press time, the euro/dollar hovers around 1.0910. The euro/dollar was still supported above the 1.0900 mark on Wednesday, with dollar funding flows generally relaxing after the Fed middle meeting and once again meeting to keep interest rates stable. Fed Chairman Jerhttps://avatradescn.comomePowell pointed out that the Trump administration's capricious policy of announcing trade tariffs on social media but later withdrawing tariffs seriously hindered growth forecasts for 2025. As a result, the Federal Open Market avatradescn.committee (FOMC) revised its GDP forecast at the end of 2025 to 1.7%, a sharp drop from December's 2.1% estimate. Technically, if the EUR/USD closes at 1.0885 below 50MA, it will move towards the support level in the range of 1.0760–1.0775.

GBP: As of press time, GBP/USD hovers around 1.3007. The pound/dollar remained hovering near the 1.3000 mark on Wednesday, with sentiment entering highs even later this year after the Fed insisted on its plan to cut further interest rates in 2025. Interest rate markets are still priced. The Fed cut interest rates by 25 basis points again at its June meeting, with Fed Chairman Jerome Powell reiterating that the Fed's still strong growth and a healthy labor market support the U.S. economy. Technically, the closest support level of GBP/USD is in the range of 1.2935–1.2950. A break below the 1.2935 level will push the GBP/USD to support level 1.2810–1.2830.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Thursday, gold trading around 3052.53. The Fed decided to keep interest rates unchanged in the range of 4.25%-4.50%, and adjusted its balance sheet, which is expected to end in April. The Fed acknowledged that labor market conditions remained solid, but pointed out that inflation remained “to a certain extent” high, reiterating its avatradescn.commitment to monitoring risks on both sides of its dual mission. Federal Reserve's economic forecasts suggest officials are expected to cut interest rates twice this year. Federal FundsInterest rates are expected to remain at 3.9%, the same as December's forecast. Other forecasts, such as inflation and unemployment, have also been raised.

Technical: The upward trend of gold remains unchanged and is ready to expand its gains and challenge the $3,100 figure. Precious metals have hit an all-time high of $3,052, breaking the psychological barrier of $3,050, but it lacks the strength to decisively aim to reach new milestones. The Relative Strength Index (RSI) turned over to overbought, but it was still close to reaching the 80 level due to the strength of the uptrend. Conversely, if gold falls below $3,000, the first support level will be the February 20 high of $2,954, followed by the $2,900 mark.

2) Analysis of crude oil market trends

On Thursday, crude oil trading around 67.02. Oil prices rose as Ukraine ceasefire negotiations approached. U.S. gasoline and distillate stocks fell in the week ended March 14, although avatradescn.commercial crude stocks increased for the third consecutive week, according to the latest data from the U.S. Energy Information Administration (EIA). Specifically, avatradescn.commercial crude oil inventories increased by 1.4 million barrels, while gasoline and distillate inventories fell. Still, gasoline demand has declined avatradescn.compared to the previous week.

Technical: As traders reacted to the EIA report, the report showed that crude oil inventories increased by 1.7 million barrels from the previous week, thus rebounded after yesterday's pullback. As WTI oil prices remain near the support level of $67.00 to $67.50, the technical side remains unchanged.

Forex market trading reminder on March 20, 2025

15:00 Germany's February PPI monthly rate

15:00 Switzerland's February trade account

15:00 UK's three-month ILO unemployment rate

15:00 UK's February unemployment rate

15:00 UK's February unemployment rate

15:00 UK's February unemployment rate

16:00 European Central Bank Governor Lagarde delivered a speech

16:30 Swiss National Bank announced its interest rate resolution

19:00 The difference in CBI industrial orders in the UK in March

20:00 The Bank of England released interest rate resolution and meeting minutes

20:30 The number of initial unemployment claims in the week from the United States to March 15

20:30 The fourth quarter current account

20:30 The Philadelphia Fed Manufacturing Index in March

22:00 The total number of existing home sales in February

22:00 The leading indicator monthly rate of the United States in February

22:30 The EIA natural gas inventory in the week from the United States to March 14

The next day, Bank of Canada Governor McClum delivered a speech

The next day, 02:30 New York crude oil futures avatradescn.completed the last on-site trading in April

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