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.
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 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
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