The USDCAD pair is under stress over the Federal Reserve announcement of raising rates. The US dollar has been sold off and commodities are rising as risk appetite flows through the markets. US stocks and oil have rallied as the Fed is expected to slow its pace of tightening in anticipation of slower jobs creation and softening in labor market conditions. At the time of writing, USD/CAD is trading at 1.2826, down some 0.4% on the day falling from a high of 1.2911 to a low of 1.2829 so far.
The Fed says recent indicators of spending and production have softened, job gains have been robust, the unemployment rate has remained low, and inflation remains elevated, reflecting pandemic-related imbalances, higher food and energy prices, and broader price pressures.
The Fed funds rate futures forecast 3.4% in December after a 75-basis point hike. That leaves 107 basis points of tightening for the remainder of 2022.
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