CANADIAN DOLLAR IS FLAT AHEAD OF FOMC RATE CALL, DOT PLOT UPDATE IN THE BARREL

• The Canadian Dollar is bound in the midrange as investors await FOMC.
• Bank of Canada to get drowned out by market’s Fed rate cut expectations.
• Fed expected to hold, investors hope for a June rate cut.

The Canadian Dollar (CAD) is mostly flat on the day as markets brace for the latest interest rate forecast and rate call from the Federal Reserve (Fed) at 18:00 GMT today, and the Bank of Canada (BoC) is unlikely to make waves as investors look for signs of a near-term Fed rate cut. Expectations of early and frequent rate trims from the Fed have been pushed down by reality for months, with the median forecast for a first rate slash currently set in June.

The Bank of Canada will release its latest Summary of Deliberations at 17:30 GMT, just ahead of the Fed’s latest Economic Projections. Canadian Consumer Price Index (CPI) inflation cooled this week, with February’s YoY CPI easing to 2.8% from the previous 2.9%, surprising markets that expected an increase to 3.1%. Canadian CPI inflation is easing enough that further rate hikes are unlikely, but not fast or hard enough to spark an immediate rate cut schedule.