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USD/CAD Moves Higher after US Federal Reserve Meeting; Fed Projects for an Additional Rate Hike in 2017

Published September 21, 2017
  • USD/CAD moved to the mid 1.2300’s this morning in reaction to yesterday’s US Federal Reserve meeting; the Fed left interest rates unchanged as expected however surprised investors with future rate hike projections
  • The Fed statement revealed that the FOMC is forecasting at least one more interest rate hike this year; odds of a rate hike at the Fed’s meeting on December 13 now stand at 63.2%
  • In a sign of confidence in the US economy, the statement also indicated that the Fed will reduce its $4.5 trillion balance sheet for quantitative purposes starting in October; the statement also noted that Hurricanes Harvey, Irma and Maria were unlikely to slowdown the US economy over the medium term
  • Global stocks remain mixed this morning as the markets continue to digest yesterday’s news from the Fed; Asian and European stocks posted modest gains, US stocks look to open slightly weaker after yesterday’s gains
  • Rating agency Standard & Poor’s cut China’s debt rating from A+ to AA- on concerns that credit is growing too quickly; while still issuing a stable rating, S&P noted that China’s credit growth “has increased its economic and financial risks”
  • Oil prices are lower this morning as investors took profits on the 1% gain this week; OPEC is set to meet in Vienna on Friday to discuss a potential extension of their deal to cut oil output