US Dollar Holds Steady as Federal Reserve Meets: What to Expect from Tomorrow's Interest Rate Announcement

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

US Dollar        1.3650-1.3750

Euro                1.4650-1.4750

Sterling           1.7100-1.7200

WTI Oil (opening level) $82.74

The US Dollar index is marginally higher this morning as the US Federal Reserve begins its two-day meeting ahead of tomorrow's announcement on interest rates. It is widely expected that the Fed will not make any changes to their interest rate policy but market watchers will be watching to see if they take a more hawkish stance on interest rates given that inflation is proving very stubborn. If they hint that interest rates will stay high for a longer period of time then the US Dollar should make some gains.

The Japanese Yen still remains front and centre in the currency markets, USD.JPY trades near the 157.00 level at the moment which is a little lower than the 159.50 level that traded before the market suspected the Bank of Japan intervened in the market.

The Canadian Dollar lost a little ground overnight as USD.CAD opens the day near the 1.3700 (0.7299) level, the currency pair continues to range trade as it awaits the Fed announcement. This morning, we get the latest news on the Canadian economy with the release of the February GDP report. It is expected that the economy grew by 0.4% in February which would be down from the 0.6% in January and will do little to support the Loonie.

After a strong day yesterday, stocks are pointing to a flat opening and should remain steady ahead of the Fed decision.