Dollar Guidance to Come From Broader Sentiments

The Canadian dollar is flat from last week’s session and only minor data are on the agenda this week. Canadian Existing Home Sales in February are due on Wednesday, International Securities Transactions are due on Thursday and Manufacturing Shipments are releasing on Friday. The loonie’s guidance will more likely come from broader sentiments and U.S. Federal Reserve policy decision on Wednesday.

The U.S. dollar is mixed today as investors go into a busy week of event risks. They will see the Federal Open Market Committee rate statement on Wednesday as well as policy decisions from the Bank of England, Bank of Japan and Swiss National Bank. A rate hike from the Fed is mostly priced in. Any additional gains will depend on the message from the Fed. The greenback will likely gain ground, if the Fed leaves the door open to the possibility of any additional rate increase beyond the three hikes that are currently priced in. The loonie is currently trading at $1.3462.

We expect a range today of $1.3417 to $.3516

No fundamental news out of Europe today other than European Central Bank President Mario Draghi speaking in Frankfurt. It's a relatively busy week in Europe as there areGerman Consumer Price Index and ZEW Survey along with euro-zone Industrial Production due on Tuesday, euro-zone Employment out on Wednesday, euro-zone Consumer Price Index on Thursday and finally euro-zone Trade Balance to release on Friday. Key fundamentals will play a significant role on the direction of the euro as ECB policymakers raised the possibility of a rate hike on Friday. The euro is currently trading at $1.4355 Canadian.

We expect a range today of $1.4308 to $1.4400 Canadian

No major fundamental release today, but there are enough key event risks for the remainder of the week to cause volatility. First on the agenda will be Brexit developments. The bill has passed the House of Commons, but is now is at its final stages of amendments awaiting the House of Lords approval which may finalize today. This could start the official activation of Article 50 by Prime Minister Theresa May as early as this week. To add to the action, U.K. employment data is due on Wednesday and the BoE monetary policy will release on Thursday. If it’s any week for the sterling to break out of its monthly range, it will be this week. The pound sterling is currently trading at $1.6441 Canadian.

We expect a range today of $1.6406 to $1.6514 Canadian

The Australian dollar is trading higher today on the back of firmer gold and copper prices. Upside could be restricted today as investors head into the Chinese Industrial Production report tonight, Australian Employment data and the FOMC rate statement on Wednesday.

Oil (WTI): $48.36 U.S. per barrel

Gold: $1,204.75 U.S. per ounce

Silver: $17.00 U.S. per ounce

Copper: $2.6305 U.S. per tonne

Dollar Index: 101.36

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