The USD/CAD pair declined on Tuesday, where strong earnings U.S. companies in addition to rising consumer confidence boosted confidence in financial markets, and accordingly, investors targeted higher yielding assets including the Canadian dollar, while oil prices also rose as the U.S. dollar weakened, which pushed the USD/CAD pair to the downside.
As we expected before, we still hold our bearish outlook for the pair, since it seems that the U.S. dollar is poised to weaken further. The FOMC will probably announce tomorrow it left the benchmark interest rates unchanged, while also leaving QE2 intact to run through June, and such a decision should push the USD/CAD pair to the downside.
Wednesday 12:30, the Durable Goods Orders index will be released for the month of March, where durable goods dropped in February by 0.9%, however, expectations show that durable goods probably increased by 1.5% in March. Moreover, durable goods excluding transportation declined by 0.6% in February, and median estimates suggest that durable goods excluding transportation increased by 2.2% in March.
Wednesday 16:30, the Federal Open Market Committee will announce the decision on interest rates, where the FOMC will probably leave interest rates unchanged, also the FOMC will probably leave QE2 unchanged to run through June, despite the recent rise in energy prices, which will probably lead to a “transitional” increase in inflation rates according to the Fed.
Wednesday 14:15, the Fed’s Chairman, Ben Bernanke will hold a press conference for the first time to discuss the Fed’s latest projections on growth, inflation, and unemployment, we should expect markets to give great attention to the press conference, since it’s the latest effort from the Fed to be more transparent in order to improve communications with the public.
Written by ForexMansion.com