ForexLive European FX news wrap: Dollar firmer with eyes on the Fed

Headlines:

• What are analysts saying ahead of the Fed later?
• Turkish lira implosion triggers safety flows in markets
• BOJ governor Ueda: Results from spring wage negotiations in line with our January view
• BOJ governor Ueda: There are still large uncertainties regarding US tariffs policy
• BOJ governor Ueda: Wage trend is on track or perhaps even slightly stronger
• BOJ governor Ueda says want to conduct policies before it is too late
• BOJ governor Ueda: Achieving 2% inflation target important for long-term credibility
• Eurozone February final CPI +2.3% vs +2.4% y/y prelim
• US MBA mortgage applications w.e. 14 March -6.2% vs +11.2% prior'

Markets:

• USD leads, NZD lags on the day
• European equities mixed; S&P 500 futures up 0.2%
• US 10-year yields up 1.3 bps to 4.294%
• Gold up 0.2% to $3,039.55
• WTI crude down 0.1% to $66.81
• Bitcoin up 2.2% to $83,829

The dollar is keeping steadier on the day with the market focus shifting towards the FOMC meeting later in the day.

There was some risk aversion early in European trading that helped, amid the implosion of the Turkish lira. USD/TRY spiked higher to a fresh record high of 42 before scaling back down now to around 38 - still up nearly 4% on the day.

The surge higher over 40 triggered some safety flows in markets with the dollar, yen and franc all catching bids for a moment. EUR/USD fell to a low of 1.0875 with EUR/CHF also dropping to 0.9540 levels, before recovering to 1.0915 and 0.9590 respectively now.

USD/JPY was also sent for a bit of a spin on BOJ governor Ueda's remarks, which didn't really offer much as a whole in my view. Still, the pair initially moved up to clip 150.00 before selling pressures came back and dragged the pair down to 149.15 amid the risk retreat. That before a recovery back to 149.75 currently.

The commodity currencies remain the laggards, unable to get off the floor with AUD/USD still down 0.4% to 0.6335 at the moment.

As for equities, US futures dipped lower for a while and pared early gains but are now holding just a little higher on the day. The mood remains fragile though and we'll have to see what Wall Street has to offer later alongside the Fed.

In other markets, gold continues to shine brightly as it gradually pushes higher with buyers testing waters above $3,040 during the session.

It's now over to Powell & co. now to provide something for markets to work with in the session ahead.