The USD is steady against other major currencies this morning. Today we have GDP this morning followed by the FOMC meetings later this afternoon. It expected the Fed will cut rates by 25 points, the third in 2019. If we see a slowdown in U.S. GDP growth and a sluggish Non Farm Payroll on Monday we may see some weakness in the USD. What the Fed say it may do with rates going forward will also affect the USD performance. Any policy statement on global growth headwinds and low inflation would signal the possibility of more easing going forward. Yesterday we saw Consumer Confidence Index dropped to 125.1 in September vs. 133.5 expected. The Conference Board said in a statement that consumers felt good about present conditions, but future expectations lowered slightly as consumers expressed some concerns about business conditions and job prospects.
Yesterday CAD was lower as oil prices fell for a second day pressured by expectations of a rise in U.S crude inventories and doubts that OPEC will cut oil output further in December. The markets attention today will be on the Bank of Canada which is widely anticipated to keep its key interest rate on hold at 1.75%. The statement afterwards should be similar to that of September, with focus on the global outlook and trade uncertainty.
Markets are maintaining a cautious tone on the EUR ahead of the FOMC meetings today and with French Q3 GDP expected to show 0.2%. The EUR will follow developments in the UK while demand for the currency may remain relatively quiet as markets brace for the Feds meeting.
Sterling stable today, holding below recent five-month highs after Prime Minister Boris Johnson won the approval from opposition Labour party for an early election in December. Traders were hoping an early election would go ahead and produce a Conservative Party majority to the end the Brexit deadlock.