USD/CAD jumps to multi-week highs above 1.2230 on Fed's dot plot
- USD/CAD rose sharply on renewed USD strength on Wednesday.
- Fed's dot plot showed a hawkish shift in the rate outlook.
- US Dollar Index tests 91.00 ahead of FOMC Chairman Powell's presser.
The USD/CAD pair rose sharply during the American trading hours on Wednesday as the FOMC's updated Summary of Economic Projections provided a boost to the greenback. As of writing, the pair was trading at its highest level since early May at 1.2237, rising 0.5% on a daily basis.
Fed's policy outlook lifts DXY
According to the Fed's dot plot, the number of FOMC policymakers who expect a first rate hike in 2022 rose to seven from four in March. More importantly, 13 policymakers are now expecting a rate hike in 2023, compared to only seven in March.
Meanwhile, the Fed left the benchmark interest rate, the target range for federal funds, unchanged at 0%-0.25% as widely expected.
With the initial market reaction, the USD started to gather strength against its major rivals and the US Dollar Index (DXY) was last seen testing 91.00, rising 0.5% on the day. Focus now shifts to FOMC Chairman Jerome Powell's press conference at 1830 GMT.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
