USDCAD remains down ahead of Fed decision

Key Movers

The US dollar was steady this morning with small gains against all major currencies. Traders braced for the last Fed meeting of 2023. Although another pause in the monetary policy rate is expected, the guiding speech from US Fed Chairman Jerome Powell will be the event that might move the needle. Another factor could be the Fed’s Dot Plot, forecasting the trajectory of interest rates based on the consensus views of Fed members. The Headline Producer Price Index (PPI), which measures the inflation on the production side for manufacturers and companies, came down -0.5% on a monthly basis to 0.0%. Yearly Headline PPI went from 1.3% to 0.9%. Core PPI remained unchanged month-over-month at 0% and declined from 2.4% to 2% year-over-year.

The EURUSD pair kept its subdued momentum intact below 1.0800 in the European session. Investors’ sights will be focused on the outcome of the Fed meeting today.

The GBPUSD pair stayed on the back foot and continued to decline toward 1.2500 in European trading. Data from the UK showed that the Gross Domestic Product (GDP) contracted by 0.3% month-over-month and weighed on Pound Sterling.

The Australian dollar is looking weak after rejection at the 0.6615 level. The USD remains steady against the AUD as hopes of a Fed pivot fade. AUD/USD surpassed a relevant support area at 0.6520 this morning.