Dollar Kicks this Week off Little Changed

The almighty U.S. dollar kicked the week off, during Asian trade hours, fairly flat. Traders are waiting on new Federal Reserve Chair Jerome Powell’s first monetary policy FOMC meeting later in the week. There are also increased fears of trade protectionism. These are keeping the financial markets on edge.

The Japanese yen was also flat this morning. Traders are a bit nervous after weekend polls suggested a drop in support for Prime Minister Shinzo Abe over his handling of an ongoing cronyism scandal.

The U.S. dollar index was flat at 90.274. The buck was up on Friday after strong U.S. economic data. This was the index’s third week in a row of gains.

U.S. industrial production was up in the month of February. The data was supported increases in output from factory and mines. The University of Michigan Consumer Sentiment Index was also higher for March. It is at its highest level since 2004.

The data reinforced investor sentiment that the global economy is in the middle of strong growth. Also, that the Federal Reserve will raise interest rates on Wednesday.

Dollar Traders wait on the Fed Meeting Results

The Fed is expected to raise rates by a 25 basis point rate hike. One key focus is whether policy makers forecast four rate hikes this year instead of three that they had projected back in December.

The expectations of more rate hikes support a currency thanks to higher interest rates attracting capital.

Still, recent political headlines, out of the U.S., have drawn attention as investors worry that President Donald Trump’s protectionist policies will disrupt the U.S. and world economic recovery.

The Canadian dollar has taken the brunt of worries regarding protectionism. It fell to its lowest price point since late June last week.  Investors are increasingly worried Trump will walk out of the North American Free Trade Agreement (NAFTA).

The Canadian currency was at $1.3103 this morning.