March 2026Monthly reportThe dollar rebounded, and later data showed an inflation jump
The dollar strengthened during March. Later US data showed an energy-heavy inflation increase, making release timing central to the retrospective.
Data window: 1 March 2026–31 March 2026
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The US dollar strengthened during March, while figures released afterwards showed a sharp rise in US consumer prices concentrated in energy. The Federal Reserve’s broad dollar index rose 2.73% between the February and March reference endpoints. March’s consumer-price report, published in April, put the monthly increase in headline inflation at 0.9%. Those observations describe the same calendar month, but they were not available at the same time.
This is an external market retrospective focused on the US dollar, selected currency pairs and US economic evidence. Complete PineConnector instruction analysis is unavailable for this period. The report therefore makes no finding about PineConnector activity or trading outcomes, and does not attempt to cover every market.
The dollar’s gain extended beyond a single currency pair
The broad dollar index increased 2.73% from the reference observation on 27 February to the observation on 31 March. It measures the dollar against a weighted basket of currencies, so its rise means the dollar appreciated across that basket overall. It does not mean every currency weakened against the dollar, or that they all moved by the same amount. The basket gives the month a wider frame than any individual exchange rate. Federal Reserve broad dollar index.
The selected pairs pointed in the same direction. EUR/USD fell 2.57%, while USD/JPY rose 1.94%. Although the signs differ, both describe dollar strength. EUR/USD states how many US dollars buy a euro; a lower reading means the euro buys fewer dollars. USD/JPY states how many yen a dollar buys; a higher reading means the dollar buys more yen. Federal Reserve euro series, yen series.
reference-rate change (%)
Fed reference observations. Higher EUR/USD means a stronger euro; higher USD/JPY means a stronger dollar against the yen. Changes exclude costs and are not broker execution returns.
Source: Board of Governors of the Federal Reserve System: H.10 nominal broad dollar index, daily; Board of Governors of the Federal Reserve System: H.10 euro daily reference rate; Board of Governors of the Federal Reserve System: H.10 Japanese yen daily reference rate Download data (CSV): Figure 1
View figure data
| Measure | Period or release date | Value |
|---|---|---|
| Broad US dollar index | 2026-02-27 to 2026-03-31 | +2.73% |
| EUR/USD | 2026-02-27 to 2026-03-31 | −2.57% |
| USD/JPY | 2026-02-27 to 2026-03-31 | +1.94% |
Quote direction matters when comparing chart bars. A positive USD/JPY change is not a positive return for the yen. The percentage change in a quote also differs from the percentage change in its reciprocal, so simply reversing a sign is not an exact conversion. Here, the pair labels are kept and the interpretation is stated in words: the dollar gained against both the euro and yen.
The month-end gain does not describe March’s entire path
These changes compare the last available reference observation before March with the month-end observation. They answer a narrow but useful question: where did the measured exchange rate finish relative to its starting point?
They cannot show whether the dollar rose steadily, reversed repeatedly or moved mainly around particular announcements. A positive monthly change can coexist with substantial setbacks inside the month. Without the daily path or an event study, it would be misleading to describe the month as an uninterrupted advance or assign the gain to a particular release.
The underlying currency observations are New York noon reference rates. They are not a universal broker closing price, a bid or offer available to every reader, or a complete investment return. A chart using another time of day may therefore show a somewhat different monthly change without either calculation necessarily being wrong. The observation time and the chosen endpoints are part of the measurement. Federal Reserve H.10 methodology.
March’s available CPI release described February
The consumer-price report published on 11 March covered February. It showed a seasonally adjusted monthly rise of 0.3% in the headline Consumer Price Index, with prices 2.4% above a year earlier. Core CPI, which excludes food and energy, rose 0.2% over the month. These were the dated CPI observations available during March from that release. BLS February CPI release.
A reference month and a publication date do different jobs. The reference month says when prices were measured. The publication date says when the statistical result became public. Keeping both prevents a retrospective from giving readers information that was unavailable at the time.
The later CPI report showed an energy-heavy jump
On 10 April, the BLS reported that March’s headline CPI rose 0.9% over the month after seasonal adjustment and 3.3% over the year before seasonal adjustment. The energy component rose 10.9% over the month, while core CPI increased 0.2%. The BLS identified gasoline as the main driver of the monthly headline increase. BLS March CPI release.
monthly CPI-U price change, seasonally adjusted (%)
These prices describe March; the BLS release arrived the following month. They are not facts that were available throughout the month itself.
Source: US Bureau of Labor Statistics: CPI 2026-03 original news release Download data (CSV): Figure 2
View figure data
| Measure | Period or release date | Value |
|---|---|---|
| All items | Released 2026-04-10 | +0.9% |
| Excluding food and energy | Released 2026-04-10 | +0.2% |
Headline inflation includes the full consumer basket. Core inflation removes food and energy, allowing a reader to see price changes outside those categories. The gap between them helps describe the composition of March’s increase. It does not make energy irrelevant: households still pay for fuel and utilities. Nor does a smaller core increase prove that an energy shock cannot affect other prices later.
Energy costs can matter through more than the household fuel bill. Businesses may face higher transport or production costs, while households have less money left for other purchases if their income does not keep pace. Whether businesses pass those costs on, absorb them or reduce activity depends on conditions that this monthly comparison does not measure. These are possible economic channels, not established causes of March’s currency movement.
Inflation also measures a rate of price change rather than the price level itself. A slower future increase would still leave prices rising. To establish that prices fell, the relevant price index would need to decline. March’s reported figures instead describe increases, with a particularly large move in the energy component.
The Fed held its rate while acknowledging uncertainty
On 18 March, the Federal Reserve maintained its target range for the federal funds rate at 3.50% to 3.75%. Its statement described inflation as still elevated and said the economic implications of developments in the Middle East were uncertain. The decision preceded the publication of March’s CPI report. Federal Reserve March statement.
Holding the target range leaves the announced policy rate unchanged. It does not establish that every condition relevant to currency prices stayed unchanged. Exchange rates compare currencies, and their relative appeal can depend on expected future interest rates, inflation, economic growth and risk, as well as current policy settings.
For example, information that changes the expected duration of a rate setting could matter even when the rate itself does not move. But confirming such an explanation for March would require evidence about expectations and their changes. A monthly exchange-rate comparison and a policy statement cannot supply that evidence on their own.
The later jobs release adds context without explaining the dollar
The employment report published on 3 April initially put March’s seasonally adjusted nonfarm payroll increase at 178,000 jobs and the unemployment rate at 4.3%. These are public US economic statistics, separate from PineConnector data. They became available after the exchange-rate window had ended. BLS March employment release.
Payroll growth and unemployment answer different questions. Payroll growth measures the change in jobs on employer payrolls; the unemployment rate describes the share of the labour force without work and actively seeking it, subject to the survey’s definitions. A positive payroll change does not by itself establish that every part of the labour market is strong.
For March, the combination worth retaining is a stronger dollar at the reference endpoints, an unchanged Fed target range during the month, and a later-confirmed inflation jump concentrated in energy. The chronology is part of that finding. It preserves the difference between what happened during March and what official releases subsequently revealed about March.