The USD stabilized near a multi-week low during early Tuesday
FOREX
The US dollar stabilized near a multi-week low during early Tuesday trading, after three consecutive sessions of losses, which during Monday’s session reached 2% in relation to last week’s maximum. The main reason for the dollar weakness is a reset in market expectations, with investors now contemplating a pause in the Federal Reserve’s rate hiking cycle. Last week it seemed almost certain that the central bank, in its quest to curb inflation, would increase interest rates by half a percentage point. It had been said that the Fed would continue to tighten monetary policy until it broke something, and that is just what may have happened, with the collapse of Silicon Valley Bank, the largest US bank to implode since the financial crisis of 2008. The failure of Silicon Valley Bank was indirectly caused by the rising interest rates, and triggered fears that further hikes will increase the likelihood of further collapses and lead to a serious economic recession. Against this background, dollar losses are to be expected as the markets reprice a scenario where the Fed signals an intention to tread more carefully, and leave rates unchanged, when it meets on March 22.
Ricardo Evangelista – Senior Analyst, ActivTrades
EURUSD
The US dollar stabilized near a multi-week low during early Tuesday trading, after three consecutive sessions of losses, which during Monday’s session reached 2% in relation to last week’s maximum. The main reason for the dollar weakness is a reset in market expectations, with investors now contemplating a pause in the Federal Reserve’s rate hiking cycle. Last week it seemed almost certain that the central bank, in its quest to curb inflation, would increase interest rates by half a percentage point. It had been said that the Fed would continue to tighten monetary policy until it broke something, and that is just what may have happened, with the collapse of Silicon Valley Bank, the largest US bank to implode since the financial crisis of 2008. The failure of Silicon Valley Bank was indirectly caused by the rising interest rates, and triggered fears that further hikes will increase the likelihood of further collapses and lead to a serious economic recession. Against this background, dollar losses are to be expected as the markets reprice a scenario where the Fed signals an intention to tread more carefully, and leave rates unchanged, when it meets on March 22.
Ricardo Evangelista – Senior Analyst, ActivTrades
EURUSD 
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