📊 Dollar Rally Pauses Ahead of FOMC — Geopolitical Market Enters Wait-and-See Mode

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■ Market Overview

The FX market is seeing a pause in safe-haven dollar buying, with a growing wait-and-see sentiment ahead of the FOMC.

Throughout March, the dollar had been supported by Middle East tensions, but this week, as oil prices stabilized, the upward momentum in the dollar has also slowed.

👉 The market is now lacking clear direction ahead of key policy events.

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■ FX Market (USD)

The U.S. Dollar Index declined initially before staging a modest rebound.

• Range: 99.46 – 99.70

• Current: 99.66 (+0.08%)

During the London session, the index fell toward the 10-day moving average, but failed to break below it and subsequently rebounded.

It is now trading slightly above the previous NY close (99.57).

👉 Overall:

• Upside is limited

• Momentum is weak

• Market lacks clear direction

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■ Market Conditions

Currently, mild dollar selling pressure is emerging.

• USD/JPY: capped in the 159 range

• EUR/USD: holding firm around 1.15

• GBP/USD: stable near 1.33

Although geopolitical tensions remain elevated, the pause in oil’s rally has reduced the urgency of dollar buying.

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■ Key Events Today

Several important events are scheduled:

• 🇨🇦 Bank of Canada
  → Expected: Hold at 2.25%

• 🇺🇸 Federal Open Market Committee (FOMC)
  → Expected: Hold at 3.50–3.75%

👉 The key focus is not policy changes, but:

How central banks assess “war-driven inflation.”

Market participants will closely watch comments from:

• Jerome Powell (Fed Chair)

• Tiff Macklem (BoC Governor)

to gauge the strength of inflation concerns.

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■ Market Structure

The market is currently driven by three key pillars:

1️⃣ Middle East geopolitical risk
2️⃣ Oil prices
3️⃣ Central bank stance

Rising oil prices feed into inflation expectations, which in turn influence interest rate expectations and currency movements.

However, given the high uncertainty, central banks are maintaining a cautious stance.

👉 This results in a “wait-and-see” phase in the market.

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■ Economic Data Today

🇺🇸 United States

• MBA Mortgage Applications

• PPI

• Durable Goods Orders (final)

• Factory Orders

• Treasury International Capital (TIC)

🇨🇦 Canada

• International Securities Transactions

Others

• South Africa: CPI, Retail Sales

• Eurozone: Final HICP

• U.S.: Weekly Crude Oil Inventories

👉 However, due to the FOMC ahead, market reactions to data are expected to be limited.

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■ Trading Perspective

This is clearly a pre-event market environment:

• Direction is unclear

• High sensitivity to headlines

• Larger moves likely after FOMC

👉 This FOMC could be particularly important, as it may provide:

Key signals about future inflation expectations

and potentially act as a turning point for the market.

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■ Summary

The geopolitical dollar rally has paused, and the market is shifting into a waiting phase ahead of FOMC.

👉 This is not the time to force directional trades.

Instead:

Wait for the post-event move and align with the emerging trend.

Patience is key in this phase.