Dovish Fed Drives USD Down; Lower Stockpiles Give Oil Prices a Boost

• The US dollar saw large losses yesterday due to a dovish interest rate hike from Janet Yellen and the Federal Reserve
• Interest rates moved to .75%- 1% as expected, however, the Fed showed little urgency for further monetary policy tightening
• Janet Yellen offered fairly optimistic remarks on the US economy with special mentions of US inflation moving towards its 2% target, but market participants were disappointed that the Fed stuck to its projection of two more rate hikes this year and offered little change for 2017 and 2018 projections
• USD/CAD moved down more than a cent yesterday as the US dollar sold off; recovering oil prices also helped the Canadian dollar make its largest one day gain in more than a year
• Oil rose for the second day in a row today, supported by a draw down in US crude oil inventories; this was the first dip in inventories in more than 9 weeks as investors look to see if the OPEC cut can help sustain a consistent decrease in global oil supply
• President Donald Trump released a “skinny budget” this morning, revealing a wish list of spending requests for Congress and economic projections from the White House; his budget laid out plans for increasing military spending while cutting foreign aid and domestic programs
• Dutch voters rejected the Freedom Party’s pledges to exit the European Union and stop Muslim immigration; current Prime Minister Mark Rutte’s Liberal Party was projected to take 33 seats in the 150-seats versus 20 seats for the Freedom Party