Fed Watch: Likely Continue the Message of “Lower-for-Longer”
USD: Global markets have failed to take on a clear direction this week, but we feel that’s about to change given the expected impact of today’s Fed meeting. It seems unlikely that the Fed will shift is messaging and will most likely continue the message of “lower-for-longer” despite improved recovery prospects over the last quarter. The 2021 growth forecast is most likely to be upgraded but most of the focus will be on the Dot Plot projections which may indicate one rate hike in 2023. An indication of a rate hike is likely to lift the dollar which should otherwise see a very limited upside given the current dovish stance.
In general, most expect the Fed’s message to be very measured to avoid rocking the already fragile bond market, and global risk sentiment. There should be some room for pro-cyclical currencies to benefit from a market friendly FOMC meeting. In G10 the loonie may be a key outperformer in the next 24 hours thanks to data the CPI data release this morning.
CAD: The CAD is edging a little softer on the day but spot is holding below 1.25. The CAD is finding support from firm commodity prices and stiffening BoC rate hike bets, with OIS contracts pricing in almost 50% chance of a 25bps rate hike 12 months out. We do not expect the BoC to tighten until late in 2022. Rate hike bets have picked up in the wake of Friday’s strong jobs data, driving short term spreads (over the USD) in the CAD’s favour and supporting the CAD’s latest push higher Rate hike bets may be getting ahead of themselves. Canada releases CPI data this morning which is likely to print higher than consensus and provide further short term upside to the loonie.
EUR: While the Fed meeting may keep USD capped, the euro may lag most peers as markets await a decision by the EMA on the safety of the AstraZeneca vaccine tomorrow. France and Italy signaled their intention to lift the suspension, although there is a risk that public trust on the vaccine has been compromised, and this may weigh on the euro as the vaccination gap between the EU and US may widen.
GBP: UK authorities have dismissed safety concerns on the AstraZeneca vaccine, which should leave the pound less vulnerable than other European currencies to the suspension story. A wait-and-see approach is likely for the GBP as we head to the BoE meeting tomorrow.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.
Please read the following update before logging in to your MTFX online account
We have updated our online dealing system to provide you with better functionality, more unique tools and an overall enhanced client experience. MTFX Online 2.0 is now available for your dealing needs. You can begin using our enhanced online portal today.
Please note that the traditional portal will be available for use until MAY 30th 2021 at which point it will be decommissioned.