Waiting For The Fed

Canada reports February CPI figures and a 0.7% increase will lift the year-over-year rate to around 1.3%. The underlying measures are firmer. The Bank of Canada next meets on April 21, and an adjustment to its economic projections could persuade others that a tapering of its bond-buying is likely in the coming months. It currently buys C$4 bln of bonds a week. Mexico reports bi-weekly reserve figures. Late in the day, Brazil's COPOM is expected to lift the Selic rate by 50 bp to 2.5%. 

The greenback edged to a new low yesterday near CAD1.2435, and although it settled on its lows, there has been no follow-through dollar selling. It has recovered to CAD1.2470 in Europe but appears toppish. Similarly, the US dollar eased to a new low for the month against the Mexican peso yesterday (~MXN20.5235) but has returned bid today. Initial resistance is seen near MXN20.70 and yesterday's high closer to MXN20.73. Meanwhile, the greenback has risen for three consecutive sessions against the Brazilian real. It has been a bit streaky lately. The three-day advance follows a three-day decline, which itself came after a three-day advance. Net-net this month, the real is off about 0.4% against the dollar, bringing the year-to-date decline to almost 7.6%.  

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Read more by Marc on his site Marc to Market.

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