Market recap: US Dollar strengthens amidst Federal Reserve announcement, Swiss Franc cuts rates - what's next for currencies?

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

US Dollar        1.3450-1.3550

Euro                1.4700-1.4800

Sterling           1.7200-1.7300

WTI Oil (opening level) $80.90

The US Dollar index is marginally stronger this morning but that is only after it had a tough day yesterday in the face of the US Federal Reserve announcement. As expected, the US Federal Reserve kept interest rates at current levels but they also reiterated the fact that they are still looking at three interest rates cuts in 2024 which surprised the market a little, I would expect the first cut to come at the July meeting but we will get more certainty around that in the coming weeks.

In a surprise move for the currency markets the Swiss Central Bank became the first Western Central Bank to cut interest rates this year with the bank cutting their rate by 0.25%, the Swiss inflation report came in at 1.25% this week so that gave the Bank room to make the cut. In a preview of what might happen to the US Dollar when the Fed cuts the Swiss Franc dropped about a percent on the announcement and should continue to trade weaker in the coming weeks.

The Canadian Dollar is a bit weaker this morning but that was after it was able to pick up some strength against the weaker US Dollar yesterday, USD.CAD hit a low near 1.3460 (0.7429) yesterday before pulling back a little higher this morning. The Loonie is picking up some strength this morning against the British Pound as the The Bank of England just announced that they are keeping interest rates at 5.25% and the market will be looking at the accompanying text to see when they start cutting rates.

The Calendar is quite today and stocks are set to have another strong day so the US Dollar may trade a little weaker, tomorrow we get the Canadian Retail Sales report so the Loonie may start to move around again.