Yesterday, the FED maintained a neutral stance, as expected. The Bank of England is also anticipated to follow a similar approach today, while the Swiss National Bank is widely expected to cut interest rates.
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Forex Signals Brief March 20: SNB Rate Cut and BOE Meeting After the FED
Skerdian Meta•Thursday, March 20, 2025•3 min read
The Federal Reserve maintained interest rates at 4.50% as expected, with the dot plot indicating two rate cuts projected for 2025. Inflation forecasts were revised upward, with PCE inflation rising to 2.7% from the previous 2.5% in December, and core inflation climbing to 2.8% from 2.5%.
Fed Chair Jerome Powell attributed the rise to tariffs but suggested inflation would eventually decline, noting that services inflation was already easing. Economic projections also showed GDP growth slowing to 1.7% from 2.1%, while unemployment is expected to increase to 4.4% from the current 4.1%.
Following the announcement, the US dollar weakened, stock markets gained, and the Nasdaq led with a 1.4% increase. Gold also surged, briefly reaching $3,051, while crude Oil gained around $0.50, despite a higher EIA inventory buildup.
Today’s Market Expectations
Bank of England Rate Policy Meeting
In the UK, the Bank of England is expected to keep the Bank Rate steady at 4.50% with a 7-2 vote split. Persistent inflation and strong wage growth continue to challenge policymakers. Services inflation, a key concern for the BoE, jumped to 5.0% from 4.4%, exceeding expectations.
Until inflation pressures ease, the central bank is unlikely to signal rate cuts. Market pricing suggests a 70% chance of a 25 basis point rate cut, though the possibility of returning to negative rates remains open. Inflation in January and February came in higher than expected at 0.4% Y/Y and 0.3% Y/Y, respectively.
Swiss national Bank Rate Cut Expectations
Market expectations currently suggest a 70% chance that the Swiss National Bank (SNB) will implement a 25 basis point rate cut. If this happens, it would lower the policy rate to 0.25% and raise concerns about approaching the zero-lower-bound and the possibility of negative interest rates. Chairman Schlegel has acknowledged that while the SNB does not favor a return to negative rates, it remains a possibility.
Inflation data for January and February came in at 0.4% and 0.3% year-over-year, respectively, both slightly exceeding market expectations. These figures are also slightly above the SNB’s Q1 projection of 0.3% Y/Y. However, the central bank anticipates inflation to decline to 0.2% in the second quarter before gradually increasing again toward the end of 2025. This outlook suggests that while inflationary pressures remain contained, the SNB may still opt for further easing to support economic growth.
Yesterday in currency the risk assets moved higher once again after Powell’s statement, especially commodity dollars, which caught some traders on the wrong foot. Stocks recovered as well. We opened 11 trading signals in total, ending the day with 7 winning forex signals and four losing ones.
Gold Returns Above 3,000
Gold remained in focus as it hit a new all-time high of $3,004.85 before retracing and closing slightly lower. Despite the pullback, gold ended the week with a 2.5% gain last week, reinforcing the bullish trend that pushed XAU to another record high of $3,037 on Monday. Yesterday XAU/USD made another record high as buyers pushed th price to $3,051 after the FED decision.
XAU/USD – H1 Chart
Holding on to Our USD/CAD Long As the 100 SMA Holds As Support
The USD/CAD pair spiked to 1.4792 after President Trump signed a 25% tariff on imports from Canada and Mexico into law. However, as trade discussions led to reductions in some tariffs, the pair dropped to 1.4150 as traders speculated on further cuts. The 100-day SMA has provided strong support despite volatility, and the pair found renewed strength after Canada’s CPI inflation came in stronger than expected.
USD/CAD – Daily Chart
Cryptocurrency Update
Bitcoin Unable to Break the 200 Daily SMA
Bitcoin markets remained subdued as uncertainty weighed on sentiment. After Trump’s announcement that Bitcoin, Ethereum, Solana, Ripple (XRP), and Cardano (ADA) would be included in a proposed US cryptocurrency reserve, Bitcoin initially jumped to $95,000. However, selling pressure quickly returned, pushing BTC below its 200-day simple moving average (SMA) and briefly under $80,000 before attempting a recovery. Despite rebounding, Bitcoin is struggling to break above key technical levels.
BTC/USD – Daily chart
Ripple XRP Keeps Making Lower Highs
Ripple received a major boost after CEO Brad Garlinghouse officially confirmed that the SEC lawsuit against the company was over. The news sent XRP surging nearly 10% to $2.58 before encountering resistance at the 50-day SMA. XRP held above $2.50 at the close, securing Ripple’s position as the third-largest cryptocurrency by market capitalization at $146 billion. As anticipated in previous forecasts, a bullish breakout for XRP appears to be unfolding.
XRP/USD – Daily Chart
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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