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US dollar weakens in shadow of Fed meeting

CAD - Canadian Dollar

The US dollar weakened for the ninth consecutive day as markets looked toward the Japanese Yen and Swiss Franc for haven assets. Of course, this trend is taking place in the shadow of today’s Federal Reserve Board meeting.

With the CHF and JPY enjoying gains through the week thus far, there is a sense the recent risk-on mood may be shifting and opening the door for another run on haven currencies. That said the USD remains under selling pressure with investors pivoting away the world’s base currency as fears the US is in for a long and protracted economic and public health crisis continue to grow.

Today’s Federal Reserve announcement should give greater insight and projections into the US economy. In addition, we could learn of the full range of tools the Fed will use to support the US economy.

Key Movers

The Euro extended gains above 1.13 on Tuesday, forcing the dollar index lower as investors pounced on comments from German Finance Minister, Olaf Scholz, wherein it was suggested discussion surrounding the 750 billion Euro recovery plan were progressing well, giving the impression that a deal/agreement will be reached in the near term. Touching 1.1358 the Euro now sits nearly 6 cents above lows touched in mid-May and appears poised to take advantage of further USD weakness with a push toward 1.15 now in sight.

Expected Ranges

USD/CAD: 1.337 - 1.338 ▼

GBP/CAD: 1.705 - 1.713 ▲

EUR/CAD: 1.519 - 1.527 ▲