#USDCAD @ 1.36152 is mixed during the Fed event on Wednesday.
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- USD/CAD is mixed during the Fed event on Wednesday.
- USD/CAD is trapped in a box 1.3600 is key.
- A break below 1.3580 tips the bias in favor of the bears.
USD/CAD is down on the day by some 0.2% as the US Dollar plummets on the back of what has been perceived to be a dovish outcome of the Federal Reserve meeting on Wednesday. A dovish hike is being priced into the markets following the Federal Reserve´s rate hike of 25 basis points and accompanying announcements within its statement.
The US Dollar has dropped as the central bank removed the prior language that signaled more hikes were coming. Instead, the statements say the extent to which more firming is needed hinges on the economy. Subsequently, Fed futures are pricing in a pause in June and July and rate cuts in September.
Currently, Federal Reserve´s Chairman, Jerome Powell is being quizzed by the press that are scrutinizing the language in the statement.
´The press are asking whether rate cuts are on the way and Fed´s Powell has dodged to comment anything in concrete. To the contrary, ´´it would not be appropriate for us to cut rates,´´ when he outlined the conditions of high inflation whereby the Fed would need to stay on its rate hiking course. ´´Rate cuts would be inappropriate given our belief that inflation will take some time to subside,´´ Fed Chairman said. Consequently, the US Dollar is finding some support:
The price is trapped in a box 1.3600 is key. If 1.3600 can hold, then the bulls will be in play still. A break below 1.3580 tips the bias in favor of the bears.
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