US DOLLAR OUTLOOK: USD/CAD EYES 2018 LOW AS FEDERAL RESERVE STANDS PAT ON MONETARY POLICYUS Greenback weak point appears to be like prone to linge
US DOLLAR OUTLOOK: USD/CAD EYES 2018 LOW AS FEDERAL RESERVE STANDS PAT ON MONETARY POLICY
- US Greenback weak point appears to be like prone to linger with the Federal Reserve staying dovish on coverage
- Fed officers reiterate requires transient inflation and a affected person strategy to normalizing
- USD/CAD value motion may proceed gravitating towards 2018 lows close to the 1.2250-level
- Go to the DailyFX Training Heart or take a look at this perception on commerce market information
Markets are at the moment digesting the newest Federal Reserve announcement that simply crossed the wires. The FOMC assertion offered little new data with the central financial institution deciding to go away the goal Fed funds price vary unchanged at 0.00-0.25% and keep the present tempo of QE at $120-billion monthly. This was extensively anticipated by markets, which in flip, is leading to an total muted response by the US Greenback. Ten-year treasury yields additionally modified little in response and proceed to fluctuate round 165-basis factors. That stated, the broader DXY Index did come underneath strain headed into the Fed choice with US Greenback weak point led by USD/CAD promoting and EUR/USD shopping for.
USD/CAD PRICE CHART: 15-MINUTE TIME FRAME (27 APRIL TO 28 APRIL 2021)
Current US Greenback weak point in opposition to the Loonie possible follows diverging financial coverage paths between the Federal Reserve and Financial institution of Canada. We outlined this bearish USD/CAD state of affairs in our US Greenback outlook printed yesterday. Even regardless of sturdy information on the US economic system because the final Fed assembly – like retail gross sales, nonfarm payrolls, and inflation – the central financial institution has adamantly communicated how coverage shouldn’t be going to vary any time quickly because the rise in inflation ‘largely displays transitory components.’ This might create a headache for Fed Chair Jerome Powell who will possible look to strengthen financial optimism whereas additionally emphasizing the significance of staying affected person and ready to normalize financial coverage till ‘additional substantial progress’ is made towards reaching its objectives.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception
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