Currency Traders Await Fed Decision

No major economic fundamentals out of Canada today other than Existing Home Sales, which printed at 5.2%. The spotlight will be on Canada's partners down south, as they have a series of high impact events throughout the day. To start the party, there were U.S. Consumer Price Index data releasing in line with expectations, Average Weekly Earnings that disappointed, Advance Retail Sales that released in line, Crude Oil Inventories releasing at 10:00 this morning and then finally the Federal Open Market Committee Monetary Policy meeting and press conference at 14:00. A 25-basis-point hike is widely factored in at this point. The risk will be the Fed’s inflation and economic growth outlook and its guidance for future hikes this year. The market is currently expecting two more hikes for 2017. A hike with no change in outlook would be viewed as "dovish" as a lot of good news is already priced in for the U.S. dollar.

Experts expect a range today of $1.3393 to $1.3510 Canadian

Quiet day on the fundamental front in Europe as only minor data released. Citizens of the Netherlands are heading into the polls to decide the makeup of the Tweede Kamer, the most important house of the Dutch parliament. The euro has come off its four-month highs and is currently trading at $1.4287 Canadian.

Observers expect a range today of $1.4246 to $1.4335 Canadian

U.K. employment data released early this morning and were mixed. The Unemployment Rate in January dropped to 4.7%, but Employment Change fell to -37K from the expected 80,000 and Average Weekly Earnings dropped to 2.2% from the expected 2.4%. Earnings will be the focus moving forward as the Bank of England has stated that this would be the policy trigger. The pound is still within its 2.5-week range and trading at $1.6416 Canadian.

Traders expect a range today of $1.6366 to $1.6468 Canadian

The Aussie is better supported today on firmer commodities, especially copper. Domestic risk will be the Australian employment reports out at 8:30 pm ET. Until then, focus will be on the FOMC rate statement this afternoon.

Oil (WTI): $48.49 U.S. per barrel

Gold: $1,200.81 U.S. per ounce

Silver: $16.91 U.S. per ounce

Copper: $2.65 U.S. per tonne

Dollar Index: 101.67

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