USD/CAD hits 1.29 as the US dollar climbs ahead of the FOMC decision

The US dollar is strengthening ahead of the FOMC decision despite today’s softer US retail sales report. The rally reflects bets that the Federal Reserve will be hawkish by tapering at a quicker pace and potentially signaling a willingness to hike rates sooner.

At the same time, the loonie is softening as oil prices slip and a 3% decline in copper today signals worries about global growth. In particularly, the rapid spread of omicron and the potential for lockdowns in Canada and China are growing concerns.Technically, the pair is a approaching some critical levels as it rises another 37 pips today. The August high at the peak of the delta worries was 1.2949.