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USD to CAD Update: US dollar rallies broadly as investors await Fed statement later this week

The Canadian dollar has fallen to the low end of its recent range and is now trading at a one month low.  The move is unrelated to anything specific to USD to CAD.  Rather, the Canadian dollar is caught up in a broad US dollar rally which came as the European Central Bank indicated late last week that it will stay accommodative for an even longer time than the US Federal Reserve.  Investors are now assessing the possibility that the Fed, which releases a statement on Wednesday, might signal a timetable for scaling back its monetary stimulus efforts.  Expectations are that the central bank will reaffirm its current policy.  If there is a nod towards pulling back stimulus, you can expect the US dollar rally to gain further steam.  On the domestic front, Canadian May inflation figures out later this week will be watched closely but are unlikely to cause a major move in the exchange rate.