US Dollar Falls for Second Consecutive Session Amid Upcoming Central Bank Policy Decisions

Market Update: March 17, 2026

Currency Markets

The U.S. dollar declined against major currencies for the second consecutive session, reflecting market positioning ahead of critical central bank interest rate decisions this week. The dollar had reached a 10-month high due to the Middle East conflict and rising oil prices, prompting investors to seek safety in U.S. assets.

Key Currency Rates

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• USD/CHF: down 0.40% to 0.7846
• USD/EUR: down 0.31% to $1.15403
• AUD/USD: up 0.46% to 0.71040

Brent Crude Futures

Brent crude futures remained above $100 a barrel, with a settlement of $103.42 per barrel, due to supply concerns. The Strait of Hormuz has been mostly shut, causing oil loading at the port of Fujairah to be partly halted.

Central Bank Expectations

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Markets expect the U.S. Federal Reserve to keep rates unchanged, but traders will be looking for commentary on inflation and economic outlook. Expectations for Federal Reserve easing have been scaled back, with markets assigning approximately 25 basis points of cuts this year.

Analyst Insights

Marc Chandler, chief market strategist at Bannockburn Global Forex LLC, notes that the dollar is being sold on rallies, indicating a subtle change in sentiment. Macquarie Group analysts led by Thierry Wizman predict that Fed officials will be hawkish, signaling a prolonged pause in rate cuts due to rising oil prices and higher inflation.

Australian Dollar Rises

The Australian dollar rose after the country's central bank raised rates for the second consecutive month to a 10-month high, cautioning that risks to inflation have tilted further to the upside.

Japanese Yen

The Japanese yen has veered toward the 2024 forex intervention zone of 161 amid rising oil prices and the Middle East conflict. Japanese Finance Minister Satsuki Katayama has reiterated the government's preparedness to take decisive steps against volatility in foreign exchange and other financial markets.