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Australian, Canadian Dollars Advance Ahead Of Fed Decision

The Australian and Canadian dollars climbed against their major counterparts in the Asian session on Wednesday, as Asian stock markets advanced amid a rebound in Chinese shares ahead of the U.S. Federal Reserve’s policy decision later today.

The Fed is expected to hike its benchmark rate by 25 basis points for the first time in three years to control high inflation.

Overnight data showed that U.S. producer prices rose less than expected in February, helping ease inflation fears and an aggressive tightening of monetary policy by the Fed.

Oil prices rose after settling below $100 a barrel on Tuesday.

Ukrainian President Volodymyr Zelenskiy said that the demands made by Russia during negotiations sounded more realistic but more time is required for taking decisions in the interests of Ukraine.

Ukrainian negotiator said that talks with Russia will continue today, though he described it as “very difficult and viscous.”

Russian President Vladimir Putin told European Council President Charles Michel that Ukrainian officials are not showing a serious intention to search for mutually acceptable solutions.

The aussie climbed to 2-day highs of 0.7228 against the greenback and 85.50 against the yen, off its early lows of 0.7181 and 85.02, respectively. The aussie is likely to challenge resistance around 0.74 against the greenback and 88.00 against the yen.

The aussie edged higher to 1.5180 against the euro, after falling to 1.5260 at 8:45 pm ET. The aussie is seen finding resistance around the 1.49 mark.

The aussie moved up to 0.9210 against the loonie and 1.0662 against the kiwi, up from its early more than a 2-week low of 0.9171 and near a 2-month low of 1.0618, respectively. The currency may locate resistance around 0.94 against the loonie and 1.08 against the kiwi.

The loonie firmed to 92.88 against the yen, its strongest level since October 2021. Against the greenback, it approached a 2-day high of 1.2732. If the loonie rises further, 94.00 and 1.25 are possibly seen as its next resistance levels against the yen and the greenback.

The loonie rebounded to 1.3975 against the euro, from a low of 1.4014 seen at 7:30 pm ET. On the upside, 1.36 is likely seen as the next resistance level for the currency.

Looking ahead, Canada inflation data, U.S. retail sales and export and import prices, all for February, business inventories data for January and NAHB housing market index for March will be released in the New York session.

At 2:00 pm ET, the Fed announces its decision on interest rate. The central bank is expected to raise the target range for the federal funds rate by 25 basis points to 0.25 percent to 0.50 percent.

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