The Fed’s latest decision sent shockwaves through markets, fueling a stock rally and major moves across currencies and commodities.

The dollar started strong but lost steam after Powell’s remarks, bitcoin soared past $86,800, and gold hit another record as traders weighed the evolving economic outlook.

Here are the major drivers and moves you may have missed in the previous trading sessions!

Headlines:

• BOJ kept rates steady as expected, members to re-evaluate “uncertain U.S. and global outlook” in April
• Japan Reuters Tankan sentiment index fell from +3 to -1 in March on concerns about U.S. tariff policies and weakness in China’s economy
• Turkish lira plunged to record lows after Istanbul mayor and Erdogan rival arrested
• Euro Area final CPI for January: 0.4% m/m (0.5% forecast, -0.3% previous) and 2.3% y/y (2.4% forecast, 2.5% previous); Core CPI at 2.6% y/y (2.6% forecast, 2.7% previous)
• EIA crude oil inventories rose by 1.7M barrels in the week ending March 14 (0.8M forecast, 1.4M previous)
• Ukrainian President Zelenskiy agreed to halt strikes on Russian energy assets in a call with U.S. President Trump
• Fed left rates unchanged, slowed down Treasury holdings runoff, raised inflation forecasts, downgraded growth estimates, and sees two rate cuts in 2025
• New Zealand exits recession with Q4 2024 GDP: 0.7% q/q (0.4% forecast, -1.1% previous)

Broad Market Price Action:

Dollar Index, Gold, SP 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView

The Fed’s meeting shook up markets, sparking big moves across the major assets. U.S. stocks surged after the Fed stuck to its forecast for two rate cuts in 2025, even as it raised inflation projections and lowered growth expectations.

The S&P 500 jumped 1.08%, the Nasdaq popped 1.41%, and the Dow climbed 0.92%, with consumer discretionary stocks leading the charge. Meanwhile, European markets were mixed. France’s CAC 40 gained 0.7%, but Germany’s DAX slipped 0.4% as investors balanced trade concerns and economic uncertainty after Fitch lowered its global growth forecast.

Bitcoin kept its rally going, adding over $2,600 to hit $86,800, fueled by upbeat sentiment following the Fed’s decision to let fewer Treasuries roll off its balance sheet, keeping more in its holdings and leaving more money in the system.

Gold extended its winning streak to seven sessions, touching a fresh record high of $3,052 as geopolitical tensions drove safe-haven demand. Oil prices edged up despite rising inventories, with WTI crude closing just under $67.00. Treasury yields initially climbed but reversed course after the Fed announcement, with the 10-year yield dipping 2.5 basis points to 4.25% as markets embraced the steady rate cut outlook.

FX Market Behavior: U.S. Dollar vs. Majors:

Overlay of USD vs. Major Currencies Chart by TradingView

The U.S. dollar started strong on Wednesday after the Bank of Japan kept interest rates unchanged, briefly climbing to 150.00 against the yen during Governor Ueda’s press conference. But as he acknowledged trade uncertainties, the dollar lost momentum and pulled back.

In European trading, the dollar kept pushing higher despite weaker Eurozone inflation data. EUR/USD dropped to 1.0859 as the euro struggled, weighed down by sluggish European stocks and growing concerns over trade tensions. Safe-haven flows into the dollar also picked up after the Turkish lira tumbled.

The Fed’s policy statement was a turning point. While JPow and his gang stuck to their forecast for two rate cuts in 2025, they also raised their inflation outlook and lowered growth expectations. Then came Powell’s press conference, which sparked the biggest moves of the day. The euro rebounded to 1.0900 after Powell said it was “too early” to tell how tariffs might affect inflation.

By the end of the session, the dollar had given up most of its gains, with USD/JPY settling near 149.00 after briefly touching 150.13. A stronger-than-expected New Zealand GDP report added more pressure, leaving the dollar mixed but mostly weaker against major currencies.

Upcoming Potential Catalysts on the Economic Calendar:

• Switzerland trade balance at 7:00 am GMT
• Germany PPI at 7:00 am GMT
• U.K. labor market data at 7:00 am GMT
• ECB President Lagarde to give a speech at 8:00 am GMT
• SNB monetary policy decision at 8:30 am GMT
• SNB press conference at 9:00 am GMT
• ECB economic bulletin at 9:00 am GMT
• U.K. CBI industrial order expectations at 11:00 am GMT
• BOE monetary policy decision at 12:00 pm GMT
• Canada IPPI and RMPI at 12:30 pm GMT
• BOE Governor Bailey to give a speech at 12:30 pm GMT
• U.S. initial jobless claims at 12:30 pm GMT
• U.S. Philly Fed manufacturing index at 12:30 pm GMT
• U.S. current account at 12:30 pm GMT
• U.S. existing home sales at 2:00 pm GMT
• U.S. CB leading index at 2:00 pm GMT
• BOC Governor Macklem to give a speech at 4:45 pm GMT
• New Zealand trade balance at 9:45 pm GMT
• Japan national core CPI at 11:30 pm GMT

The European session could bring big moves for CHF with the SNB decision and for GBP with the BOE’s policy update and Governor Bailey’s speech.

In the U.S. session, USD could react to jobless claims, manufacturing data, and housing reports, while CAD traders will be watching for any policy hints from BOC’s Macklem.

Keep your eyes peeled for central banker or geopolitical remarks that could shake up price action for the major currencies!

Don’t forget to check out our brand new Forex Correlation Calculator when taking any trades!