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All Eyes on Fed (Tomorrow) While Oil Prices Push Higher
Published March 20, 2018
EU Brexit negotiator Barnier confirmed yesterday that a 21 month status quo Brexit transitional deal had been reached with the UK. This would begin at the Brexit date of March 30th, 2019 and end on December 31st, 2020. In reaching the transition, the UK also agreed to the principle of the EU’s ‘backstop’ solution for Northern Ireland after Brexit.
USD/CAD seems to be in a holding pattern ahead of tomorrow’s FOMC, currently hovering around 1.3070.
Today is extremely light as far as economic data goes. More clarity surrounding the Canadian economy could arise on Friday with the release of inflation and retail sales data. It is expected that the Bank of Canada will remain on hold until NAFTA negotiations are complete.
Given that the FOMC is widely expected to raise the funds rate another 25 bps at this week’s meeting, the main focus will be the latest Summary of Economic Projections (SEP), along with Fed Chair Powell’s inaugural post-meeting press conference.
Oil prices are up today as Middle-East tensions sparked concerns over potential supply disruptions, although rising US output levels continued to weigh. Brent crude is up ~1.56% with WTI crude up ~1.79% on the day, trading at $66.85 and $62.90/barrel, respectively. The US Energy Information Agency is set to release its weekly data on oil and gasoline stockpiles tomorrow.