FOREX TODAY: RBA MAINTAINS CURRENT COURSE, BOJ ELIMINATES NEGATIVE INTEREST RATES

WHAT YOU SHOULD BE AWARE OF ON TUESDAY, MARCH 19 IS AS FOLLOWS:

The Australian dollar and the Japanese yen saw a jump in volatility during Tuesday's Asian trading which assessed the monetary policy announcements released by the Bank of Japan (BoJ) and the Reserve Bank of Australia (RBA). Later in the day, market participants will be keenly monitoring data from Germany's ZEW Survey and Canada's Consumer Price Index (CPI). The US economic docket will contain February's housing starts. The BoJ announced that interest rates would rise by 10 basis points (bps), from -0.1% to 0%, and that it was abandoning its yield curve control (YCC) plan. These two options matched what the market was expecting in its policy statement that it will apply a 0.1% parked with the JPY and that short-term interest rates will be for policy. The USD/JPY to surge higher; at end, it was seen rising over 150.00 by about 1% for the day.

Press conference that followed the meeting, BoJ Governor Kazuo Ueda said that the bank will continue to buy around the same amount of Japanese government bonds as it has in the past and that it will consider all options for broad easing.

The value of the Japanese Yen right now

The table below shows the percentage change of the Japanese Yen (JPY) versus the major currencies listed today. The Japanese yen was the least strong currency in comparison to the US dollar.

The heat map shows the percentage fluctuations of the major currencies in relation to each other. The base currency is chosen from the left column, and the quotation currency is chosen from the top row. For instance, if you choose the Euro in the left column and go down the horizontal line to the Japanese Yen, the percentage change displayed in the box will be EUR (base)/JPY (quote).

During the March policy meeting, the RBA maintained 4.35% rate. Higher interest rates are contributing to the development of a more stable equilibrium between the demand of the economy, according to the RBA's policy statement. The Reserve Bank of Australia said, “The economic, despite encouraging signs that inflation is moderating.”

RBA Governor Michele Bullock stated that it would only be taken if they were far more confident that inflation would decrease. The bearish pressure following the RBA meeting and lost over 0.5% of its value for the day. The last trade was little above 0.6500.

After closing in the green on Monday for the fourth day in a row, the US Dollar Index is in the early European session on Tuesday. While all is going on, US stock index futures are trading little lower and 10-year US Treasury bonds is at 4.3%.

The EUR/USD saw slight losses on Monday, and it fell slightly lower early on Tuesday. When compared to the economic mood figures, the pair stays above 1.0850.

Tuesday's early European session saw the GBP/USD pair continue to weaken and move closer to 1.2800. The UK's Office for National numbers will release its numbers on Wednesday.

Gold failed momentum and ended the first day of the week relatively unchanged. It is difficult for XAU/USD, which was last seen fluctuating in a narrow channel below $2,160, given the persistence of the US Treasury bond yields.