Investing.com - Here are the top five things you need to know in financial markets on Thursday, March 17:
1. Fed outcome remains in spotlight
The Federal Reserve remained in the spotlight Thursday, one day after the central bank kept interest rates unchanged and indicated just two more rate hikes this year instead of the four expected.
The Fed scaled back forecasts for how high interest rates will rise this year following the conclusion of its policy meeting on Wednesday, citing the potential impact from weaker global growth and financial market turmoil on the U.S. economy. Fed officials also cut their expectations for economic growth and inflation.
Investors and economists dialed back their own rate hike expectations in wake of the Fed’s surprisingly dovish outlook, with traders of interest-rate futures now seeing no rate rise before September.
2. Dollar crashes to 5-month lows
The dollar index extended sharp losses from the prior session on Thursday, losing another 0.7% to 95.03, a level not seen since October 21, as investors sold off the greenback after the Fed reduced its expectations for interest rate hikes in 2016 to two from four.
Against its Japanese counterpart, the dollar slipped 1% to 111.43 yen by 10:00GMT, or 6:00AM ET, after earlier falling to a three-week low of 111.38 (USD/JPY). Against the euro, the greenback skidded 0.7% to 1.1301 (EUR/USD), while China's yuan currency touched 6.4856 to the dollar (USD/CNY), its strongest level so far in 2016.
3. Oil extends rally to 3-month highs
Oil prices extended strong gains from the prior session on Thursday, with the U.S. benchmark climbing to fresh three-month peaks amid growing hopes major oil producers will work together to cap output.
U.S. crude rose 98 cents, or 2.55%, to $39.44, while Brent rallied 97 cents, or 2.41%, at $41.30 a barrel.
On Wednesday, oil futures soared almost 6% as an agreement by global oil producers to meet next month to discuss an output freeze, bullish U.S. supply data and a broadly weaker U.S. dollar as a result of a surprisingly dovish Fed all contributed to strong gains.
4. U.S. data eyed
Market players will get a fresh reading on the strength of the economy as a handful of secondary data reports are the major events on the calendar.
The data releases due Thursday include Fed Chair Janet Yellen's preferred indicator on the labor market, the Job Openings and Labor Turnover Survey for January.
Other U.S. economic reports due Thursday include weekly jobless claims, the Philadelphia Fed survey for March, February leading indicators and fourth-quarter current account data.
5. Bank of England "Super Thursday"
The Bank of England will release its rate decision and minutes of its Monetary Policy Committee meeting at 12:00GMT, or 8:00AM ET, on Thursday. Last month, the Monetary Policy Committee voted 9-0 to keep rates on hold at a record low 0.5%.
Expectations for a rate hike by the BOE have been recently pushed back to the first quarter of 2017 due uncertainty over a June referendum on whether or not Britain should stay in the European Union.