USD Surges Dramatically: Exploring the Impact of the Fed's Hawkish Stance and Economic Projections

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4250-1.4490

Euro                 1.4860-1.5080

Sterling            1.8050-1.8280

WTI Oil (opening level) $69.86

The CAD is opening at 1.4383 ( 0.6952)

Headlines

·    USA FOMC Meeting yesterday produced a 'hawkish' cut of 25 bps along with guidance that the year 2025 may only see 2 more cuts. The Fed also projected the USA unemployment a bit lower- this and next year. Core Personal Consumption Expenditures (PCE) inflation is projected to be much higher in 2025. After the meeting the USD rose dramatically. The CAD spiked to 1.4467. The Euro to 1.035. The USD index went up 100 bps on the news and reaction.

·    Bank of Japan. No change to rates, just as expected. There is a clear sense that the Bank wants a clear look at the Trump policies and their impact before knowing how to proceed.

·    New Zealand Q3 GDP fell 1.5% year over year, showing a country in a recession. This negative number adds to the gloom and the pressure on the New Zealand Dollar.