On spurred hopes that the Federal Reserve would eventually aid the economy, the US dollar is seen to reverse the recent uphill climb against the Canadian dollar today. Returns are projected for the riskier Loonie currency following the minutes of the policy making body with regard to the recent Fed meeting. USDCAD trades reached a 0.9945 high yesterday but price activity has fallen back down to yesterday’s opening price of 0.9887, even reaching as low as the 0.9883 price mark.

Fed policymakers signified their readiness to boost record stimulus should the economic recovery continue to be stalled. Recent economic data from the world’s largest economy however continue to be dampened albeit with notable improvements. Yet, the Fed is unsatisfied, and in the statement after the meeting mentioned that they will step up record stimulus if needed to spur growth and cut a jobless rate stuck above 8 percent since February 2009.

Attention now turns to Fed chief Ben Bernanke as he is set to deliver a speech on monetary policy to the Kansas City Fed’s annual symposium of central bankers and economists at Jackson Hole, Wyoming on August 31. Market participants expect that he would clarify his thinking on the need for stimulus in view of recent reports showing gains in retail sales and housing. It can be remembered that global stocks and commodities soared after Mr. Bernanke signaled a second round of bond buying on August 27, 2010. The Fed decided in November 2010 to buy $600 Billion of Treasuries through June 2011.

Adding to the bright picture in the financial arena today is the report on last week’s jobless claims out today. The weekly measure of labor activity is forecast to shed 1,000 claims from the previous release of 366,000 to 365,000. Should the actual figure corroborate the median estimate of economists, this would keep the jobs number as manageable though still lackluster enough to keep QE3 hopes alive.

In line with projections of more risk-on trades today, the Greenback is deemed to step aside in the currency exchanges today. A short position is suggested for the USDCAD, though be cautious of probable price corrections.

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