- USD / CAD is trading at new daily highs, approaching 1.2500.
- The US Dollar Index tests 92.00 ahead of the FOMC announcements.
- Rising US Treasury yields continue to support the USD.
The pair USD / CAD it continued to rise during US trading hours and hit a new daily high of 1.2491. At time of writing, the pair was up 0.35% on the day at 1.2487.
USD Maintains Bullish Momentum As Treasury Yields Rise
The broad-based USD strength ahead of the FOMC policy announcements appears to be driving the USD / CAD rally on Wednesday. Backed by a 2.7% rise in the yield on 10-year US Treasuries, the US Dollar Index is up 0.13% on the day to 91.99.
Although the Fed is expected to keep its asset purchase strategy and policy rate unchanged, the updated Economic Projections will provide new insight into policymakers’ views on long-term interest rates and interest rates. inflation expectations.
In anticipation of the FOMC meeting, “Markets will be watching Fed Chairman Jerome Powell’s press conference for clues on future policy changes, especially as it relates to asset purchases from the FOMC. Fed, “UBS analysts said. “In particular, the markets have been looking for Powell to turn down the recent surge in Treasury yields. So far he hasn’t, but today is another opportunity to do so.”
On the other hand, data from Canada showed that inflation, measured by the Basic Consumer Price Index (CPI), fell to 1.2% in February from 1.6% in January. This reading was lower than the market expectation of 1.4%, but failed to trigger a notable market reaction.
Technical levels
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