The agenda this week is packed with news that will dictate the course of the USD, as Fed members meet tomorrow and Wednesday. The meeting will wrap up with a key rate decision and new economic forecasts. Important indicators concerning retail sales and inflation will be released Tuesday and Wednesday respectively in the leadup to the Fed decision. Economists expect that the Fed will not raise rates before its June meeting. Nevertheless, the outlook and comments from Fed Chair Janet Yellen will be pored over to look for clues as to where interest rates and the greenback are headed.
Closer to home, we’ll be keeping an eye on Manufacturing Sales Wednesday and Retail Sales on Friday to check the pulse of the Canadian economy. Most importantly, we could see crude oil (WTI) continue to rise and break through the critical $40 threshold, which would result in an even stronger loonie. However, we believe that the recent rise in crude oil and the dollar was too fast-paced, and a USD/CAD correction toward 1.34-1.35 is possible this week. Now would be a good time to review your hedging strategy in order to safeguard your business from this volatility. Have a great week!
