Global markets have shifted to a more positive outlook after a gloomy close yesterday. A number of better-than-expected corporate earnings announced after the market closed along with relatively less extreme inflation number out of Australia, overnight, helped change the global economic outlook. Generally, positive economic outlook strengthens the Canadian dollar versus the USD dollar. The Canadian dollar vs. USD dollar exchange rate is currently sitting at 1.2877 or 0.7765 (CAD/USD)
Today’s Fed’s interest rate decision is expected at 2 pm EST. Global markets have factored in a 75bp hike and it’s unlikely to see much reaction if the Fed sticks to the script. However, if the Fed matches the BOC with a 100bp hike, we would expect the USD/CAD exchange rate to test and maybe even break the 1.30 range.