USD/FOMC – The dollar rose to a three-week high on Wednesday after the Federal Reserve signaled that it would likely raise rates at its March meeting and later announce a significant reduction in its asset holdings.
Commenting on the Fed’s taper announcement, Ameriprise Financial stated that “the statement still leaves a lot of questions to be answered particularly when it comes to the balance sheet roll-off. There wasn’t a whole lot of detail provided.” But added that “the idea of the balance sheet reduction as now mentioned in the statement puts us on the table for June.”
CAD/BoC – The Canadian dollar briefly sold off on Wednesday after the BoC kept policy unchanged versus outside bets for a potential 25 basis point hike. Although rates remained unchanged, the BoC did signal it would start hiking in the months ahead, with Governor Macklem stating that “the message is pretty clear. We’re on a rising path.”