San Francisco Federal Reserve Bank President John Williams confirmed in his speech yesterday that recent US economic indicators are solid enough, so they could enable the US Fed to adopt resolute measures on monetary policy. The policymaker expects two or even three rounds of tightening later this year. He foresees three or four rates hikes in 2017. To sum up, the US Federal Reserve’s officials are sending clear message to financial markets that the regulator is serious about raising the key interest rate in June. However, Canada’s central bank is unlikely to change its monetary policy in the near future. A regular monthly meeting of the Bank of Canada is scheduled for tomorrow. In an effort to predict its outcome, most experts share the viewpoint that the central bank is to leave the key interest rate unchanged at 0.50% at least until the second half of 2017. The deviation between monetary policy of the US and Canada is obviously making an impact on the national currencies. The US dollar is still winning favor with investors. Currency strategists forecast the USD/CAD pair is set to move upward amid sliding crude prices. Reserve Bank Governor Glenn Stevens delivered a speech today which traders considered a sign to sell the Australian dollar. The governor agreed that persistently low inflation still does not correspond to the central bank’s inflation target. Nevertheless, he expressed confidence inflation would return to the 2-3% range in the medium term without extra moves from the regulator. However, this remark did not revive investors’ interest in the Australian currency. The AUD/USD pair surpassed the support level of 0.72 and went down. In the European premarket, the pair was trading at the mark of 0.7160. https://www.instaforex.com
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