USD/CAD – Canadian dollar flat ahead of Fed announcement

The Canadian dollar is drifting in the Wednesday session. Currently, USD/CAD is trading at 1.3321, down 0.03% on the day. On the release front, there are no Canadian events. In the U.S., the Federal Reserve winds up a 2-day meeting and will release a rate statement.

All eyes are will be on the Federal Reserve, which holds a policy meeting on Wednesday. The Fed is widely expected to maintain the benchmark rate at a range between 2.25 – 2.50 percent. Investors will be expecting the Fed to play a dovish tune in the March rate statement. The Fed’s balance sheet will also be under scrutiny, with the policymakers expected to announce when they will stop reducing the $4 billion balance sheet. The Fed has been reducing assets by $50 billion a month, but there has been criticism that this tightening is choking economic growth. The Fed will also publish its new dot plot, which is used to convey its interest rate outlook.

The Bank of Canada held the benchmark rate at 1.75% at its last meeting, but the bank’s stance has become more dovish in response to the economic downturn, which is deeper than policymakers estimated. The most recent rate statement noted that the economy could continue to require stimulus and said there was “increased uncertainty” regarding the timing of future rate hikes. If economic conditions remain soft, the BoC may have to consider a rate cut to stimulate growth. Weak oil prices and the global trade war have hurt the Canadian economy and dampened the critical export sector, and the Canadian dollar, which is down 1.2% in March, could face further headwinds.

Aussie slides amid weaker economic data

Fed in focus as Brexit Strolls into Final Week

Dollar mixed ahead of Fed

USD/CAD Fundamentals

Wednesday (March 20)

• 10:30 US Crude Oil Inventories. Estimate 0.5M
• 14:00 US FOMC Economic Projections
• 14:00 US FOMC Statement
• 14:00 US Federal Funds Rate. Estimate <2.50%
• 14:00 US FOMC Press Conference

Thursday (March 21)

• 8:30 Canadian ADP Nonfarm Employment Change
• 8:30 Canadian Wholesale Sales. Estimate 0.5%
• 8:30 US Philly Fed Manufacturing Index. Estimate 4.6
• 8:30 Unemployment Claims. Estimate 226K

*All release times are DST

*Key events are in bold

USD/CAD for Wednesday, March 20, 2019

USD/CAD, March 20 at 9:25 EST

Open: 1.3325 High: 1.3346 Low: 1.3318 Close: 1.3333

USD/CAD Technical

USD/CAD was flat for much of the Asian session. The pair showed limited movement in the European session and has posted small losses in the North American trade

• 1.3290 is under pressure in support
• 1.3383 is the next resistance line
• Current range: 1.3290 to 1.3383

Further levels in both directions:

• Below: 1.3290, 1.3200 and 1.3125
• Above: 1.3383, 1.3445, 1.3552 and 1.3662

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.