At 2pm EST on Tuesday the U.S. Federal Reserve will announce whether or not it will be raising the benchmark interest rate – but the markets have already started moving in advance of the announcement, due to widespread anticipation that the Fed will implement the proposed interest rate hike.If implemented, the U.S. interest rates will move from 1 percent to 1.25 percent.
Traders have also taken interest in the U.S. Treasury Department’s plan to restructure the country’s financial regulatory framework. The plan unveiled on Monday included more than 100 regulatory changes which, if implemented, will be made primarily through regulators rather than Congress.The plans would largely benefit banks and trade groups, though critics are concerned that the proposed changes would make it easier for banks to cheat their customers and could set the country on course for another financial meltdown.
Canadian Fed Sends Loonie Higher
The Canadian dollar traded near two-month highs on Tuesday morning after Bank of Canada Senior Deputy Governor Carolyn Wilkins said that first-quarter growth was “pretty impressive” and that the central bank is weighing whether the current low rates are still necessary.Chances of a Canadian interest rate hike increased significantly after Wilkins’ speech.
The Canadian dollar strengthened for a second consecutive session on Tuesday morning, gaining 0.4 percent after a 1.1 percent spike on Monday.The U.S. dollar was slightly higher against the yen, hitting 110 before dipping slightly, to trade at 109.98 at 6:23 am. GMT on Tuesday.
Both the Bank of England and the Bank of Japan are expected to make policy announcements towards the end of this week.
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