Euro and Yen Rise, Dollar Index Falls After Central Bank Meetings

Global Currency Market Update - March 19, 2024

The euro and Japanese yen strengthened against the U.S. dollar as key central banks kept interest rates steady amid concerns about inflation from rising oil prices.

The European Central Bank (ECB) left interest rates unchanged as expected, while signaling a close watch on growth and inflation risks from surging oil prices. The euro rose 1.18% against the dollar to $1.1585.

The Bank of Japan (BOJ) held interest rates steady but maintained its bias for tighter monetary policy, with the yen up 1.4% against the greenback to 157.61 per dollar.

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The Bank of England (BOE) voted unanimously to keep borrowing costs on hold in the face of inflation risks from the war in the Middle East, with sterling strengthening 1.4% to $1.34360.

Key Economic Indicators

• Oil prices rose 1.18% to settle at $108.65 after Iran attacked energy facilities across the Middle East.
• Brent crude futures rose 1.18% to settle at $108.65.
• U.S. dollar index fell 1% to 99.20, with the index still near its 10-month high reached late last week.
• Australian dollar edged up 0.83% to $0.70810 after data for February showed unemployment ticked higher to 4.3%.
• Swiss franc weakened after the Swiss National Bank kept rates unchanged and signaled a readiness to intervene to curb a recent surge in the currency.

Cryptocurrency Update

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

• Bitcoin fell 1.16% to $70,407.69.
• Ethereum declined 1.92% to $2,146.33.

Analyst Commentary

Market analysts are closely watching the inflation effects and output effects of the war in the Middle East, with central bankers globally reevaluating their monetary policies. The Federal Reserve held interest rates steady on Wednesday, projecting higher inflation, steady unemployment, and a single reduction in borrowing costs this year.