USD/CAD consolidates in a range above 1.3300 as traders keenly await FOMC decision – by hareshmenghani USDCAD Fed Inflation RiskAppetite Currencies
gh the Asian session on Wednesday. Spot prices, however, manage to hold above the 1.3300 mark as traders keenly await the outcome of the high-anticipated FOMCThe Federal Reserve is scheduled to announce its decision later today and is widely expected to skip raising interest rates, bolstered by the below-consensus reading of the US consumer inflation. In fact, the US Labor Department reported on Tuesday that the headline CPI barely rose in May and the yearly rate decelerated from 4.9% to 4.
The year-on-year inflation rate, meanwhile, is still twice the Fed's 2% target and supports prospects for further policy tightening by the US central bank. It is worth recalling that the markets have been pricing in a greater chance of another 25 bps lift-off at the July FOMC meeting. Hence, the main focus will also beChair Jerome Powell's comments at the post-meeting presser, which will be closely scrutinized for clues about the future rate hike path.
Heading into the key central bank event risk, investors' anxiety is evident from a generally softer tone around the equity market, which could offer some support to the safe-haven Greenback. Apart from this, a modest downtick in Crude Oil prices might undermine the commodity-linkedand contribute to limiting the downside for the USD/CAD pair, at least for the time being.
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