Fed cuts rates with further cuts for 2019 unclear

Daily Currency Update

CAD - Canadian DollarThe Canadian Dollar has recouped yesterdays move lower against the US dollar after the Fed elected to issue a 25-basis point cut to interest rates, a move widely anticipated and priced in by most analysts. In the wake of the cut, markets shifted focus to Fed Chairman Powell’s statement as a new marker for direction. Powell stressed the US outlook remained solid, indicating moderate interest rate adjustments would be all that was needed to keep the economy on track. These comments left markets wanting and were considered hawkish when compared with expectations, allowing the USD to rally across the board, and sending the CAD toward intraday lows at 0.7500 cents US.Markets had expected the Fed would deliver another cut before years end, however, the dot plot of projections suggest the committee is divided with median outlooks consistent with a policy of neutrality through the next three months, that is no additional rate cuts before 2020. With the Fed policy decision behind us, our attentions turn to domestic data coming Friday, with Canadian Retail Sales Figures from the month of July released at 8:30 am.