The FOMC is expected to announce its decision on the interest rate tomorrow, at 18:00 (GMT).

BoC is widely expected to remain on hold and keep interest rates at +1.75%.

Market is currently pricing in the probability of retaining the current interest rate by 92.5%, according to Feds Funds Futures (FFF).

As a general comment, we would like to add that we share that view as the bank raised interest rates in the last meeting and the good financial data which came out do not necessitate a further rate hike.

Even the release of the Core PCE Index on Monday marked an acceleration as it reached +1.9% yoy and one could argue for a rate hike, however the FFF probability didn’t alter much.

The latest dot plot showed a three rate hike path for 2018 and we see the case for the next rate hike to be in the following meeting in June possible though not certain.

However after Monday’s release we could have a change of hearts in the FOMC and the balance of power may shift towards a 4 rate hike path.

As for the accompanying statement could have a more hawkish tone.

Overall, we see the case for a positive effect on the greenback.

Please be advised that at the time of the announcement and later on we could have greater volatility than usually.