Market Update: US Dollar Strengthens Amid Fed's Awaited Decision, Stocks Brace for Volatility

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

US Dollar        1.3750-1.3850

Euro                1.4650-1.4750

Sterling           1.7150-1.7250

WTI Oil (opening level) $80.44

The US Dollar index is marginally stronger today and stocks are poised for another down day as the market awaits word from the US Federal Reserve later today. The Dow Jones was down over 500 points yesterday as it is fully expected that the US Federal Reserve will keep their interest rate policy the same and may comment that with inflation proving very stubborn there may only be one expected rate cut this year instead of the previously expected two cuts. If this situation plays out as expected then you should see the US Dollar jump and stocks fall back.

The Canadian Dollar has had a tough run over the last 24 hours as USD.CAD moved much higher to trade at 1.3770 (0.7262) this morning. The Loonie reacted to the weaker February GDP report that showed the economy only grew by 0.2% and the early indications are the March number will be very similar. Markets now fully expect that the Bank of Canada will cut interest rates in June which will keep the Loonie trading with a weak bias over the next month ahead of that announcement.

Everything today will depend on what the Fed says about future interest rate cuts in the US, ahead of that markets should remain steady but expect lots of volatility after the announcement.