USDCAD, H1
Fed VC Clarida supports the gradualist policy trajectory in his speech on Data Dependence and U.S. Monetary Policy. Such a stance allows the FOMC to accumulate more information, as the Fed updates its estimates of the “uncertain” neutral rate. He also stated that rates are “much closer to the vicinity” of neutral than when the Fed began hiking. He noted that rate hikes are still necessary, but he said risks have become more symmetric, The Fed should meet its policy objectives on a “sustained basis.” He sees a robust economy and a healthy labour market, while U. Michigan inflation expectations are at the lower end of stability, while TIPS are show expected PCE inflation somewhat less than 2%. Many analysts perceive this a continuation of his relatively dovish stance, however, there is nothing in the speech to suggest that the rate hike path should slow. Details can be found here goo.gl/HCfGqt
All eyes now turn to his boss, Jay Powell, and his scheduled speech tomorrow (Wednesday) at 17:00 GMT.
The USD got a bid on the speech with USDJPY over 113.60 and testing the session high of 113.65 and USDCAD reversing earlier losses from lows of 1.3242 to test 1.3272
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Stuart Cowell
Head Market Analyst
HotForex
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