USD/CAD jumps to multi-week highs above 1.2230 on Fed's dot plot
- USD/CAD rose sharply on renewed USD strength on Wednesday.
- Fed's dot plot showed a hawkish shift in the rate outlook.
- US Dollar Index tests 91.00 ahead of FOMC Chairman Powell's presser.
The USD/CAD pair rose sharply during the American trading hours on Wednesday as the FOMC's updated Summary of Economic Projections provided a boost to the greenback. As of writing, the pair was trading at its highest level since early May at 1.2237, rising 0.5% on a daily basis.
Fed's policy outlook lifts DXY
According to the Fed's dot plot, the number of FOMC policymakers who expect a first rate hike in 2022 rose to seven from four in March. More importantly, 13 policymakers are now expecting a rate hike in 2023, compared to only seven in March.
Meanwhile, the Fed left the benchmark interest rate, the target range for federal funds, unchanged at 0%-0.25% as widely expected.
With the initial market reaction, the USD started to gather strength against its major rivals and the US Dollar Index (DXY) was last seen testing 91.00, rising 0.5% on the day. Focus now shifts to FOMC Chairman Jerome Powell's press conference at 1830 GMT.
Technical levels to watch for