The U.S. dollar pared gains on Wednesday after the Federal Reserve left rates unchanged at 4.25%-4.50%, signaling caution amid heightened economic uncertainty. Chair Jerome Powell highlighted rising downside risks and lowered GDP forecasts, prompting U.S. 2-year yields to decline to 4%. Equities rallied, with the S&P 500 rising 1.5% on the dovish guidance.

Euro Pressured by Ukraine Concerns

EUR/USD weakened, sliding 0.52% as earlier optimism about Germany's fiscal package faded and Russia rejected a proposed 30-day Ukraine ceasefire. While President Trump noted ongoing progress in peace talks, EUR/USD remains vulnerable, trading between 1.08 and 1.10. A break below 1.08 risks deeper declines towards the 200-day moving average at 1.0724.

Sterling Eases Before BoE Decision

GBP/USD edged lower, declining 0.08% from recent highs above 1.30 as investors adopted a cautious stance before Thursday's Bank of England meeting. With potential dissent over easing, key support at the 200-day moving average of 1.2803 comes into focus.

Yen Gains on Yield Drop, Risk-Off Sentiment

USD/JPY fell 0.29%, breaking below its 21-day moving average at 149.09 due to falling U.S. yields and fragile risk sentiment. Technical indicators suggest further downside risk toward support at 148.35.

Commodities Mixed Amid Trade Tensions

Gold rose modestly (+0.35%) amid lingering trade uncertainties, while copper surged 2.07% on speculation of supply disruptions from potential U.S. tariffs. Oil prices edged up 0.51% after U.S. inventory data indicated selective demand resilience.

Markets remain cautious ahead of central bank decisions, geopolitical developments, and ongoing trade policy uncertainty.