USD/CAD - Dollar Traders on Fed Tenterhooks

The Canadian dollar strengthened against its U.S. counterpart as oil prices move higher. WTI Crude Oil is trading at $50.48, up 1.2%, close to its highest level in a month. Crude oil inventories are expected today at -2211.57k from 5,888K last week. This week''s biggest event risk for the loonie will be Consumer Price Index figures on Friday. Existing Home Sales and Crude Oil Inventories are the key economic fundamentals before the crucial Federal Open Market Committee meeting ends today.

The U.S. Federal Reserve is expected to leave interest rates level at 1.0-1.25%, the main ingredient in today’s statement will be how the Fed will implement the unwinding of its $4.5-trillion balance sheet. The statement from the FOMC is to be released at 2 p.m ET.

Traders expect a range today of $1.2167 to $1.2312

News yesterday reported that European Central Bank policymakers might not follow through with expected tapering of asset purchases, but the market should get more hints when ECB President Mario Draghi appears in Frankfurt tomorrow at the European Systemic Risk Board conference and in Dublin on Friday. German Producer Price Index in August released in line with expectations of 0.2% m/m and 2.6% y/y. The euro is currently trading at $1.4691.

Observers expect a range today of $1.4652 to $1.4760

August Retail Sales in the U.K. printed at a respectable 1.0% m/m and 2.8% y/y, which was above expectations of 0.0% m/m and 1.4% y/y. Sales should be another reason why the Bank of England will raise rates before the end of the year. The sterling had a temporary boost but has retraced most of its gains already heading into the North American trading session. The pound is currently trading at $1.6596.

Experts expect a range today of $1.6546 to $1.6660

The Australian banks are causing a stir as ANZ is now the second bank, joining NAB, with their prediction that the Reserve Bank of Australia will raise rates twice in 2018. ANZ is hawkish on the domestic economy, as growth and inflation have been making some ground. The Aussie is currently trading at $0.9877.

Oil (WTI): $50.43 U.S. per barrel

Gold: $1,311.83 U.S. per ounce

Silver: $17.26 U.S. per ounce

Copper: $2.9774 U.S. per tonne

Dollar Index: 91.77

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