Sterling Strength Weighs on USD and CAD as Focus Shifts to Inflation and Interest Rate Cuts

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3650-1.3750

Euro                 1.5050-1.5150

Sterling            1.7700-1.7800

WTI Oil (opening level) $74.85

The US Dollar index is marginally weaker this morning as Sterling hitting a one month high dragged GBP.USD lower overnight. Financial markets are comfortable once again that the US economy is not going to fall off a cliff and that the Federal Reserve will start measured interest rate cuts next month

The Canadian Dollar remains steady in its recent range but is marginally weaker as it moved towards the 1.3680 (0.7310) level to start the week. The Loonie like the US Dollar also lost a lot of ground to Sterling overnight with GBP.CAD moving to trade as high as 1.7740 before falling back a little.

It is a big week for the Canadian Dollar as we get the latest inflation report tomorrow followed on by the Retail Sales report on Friday, there should be enough information this week to allow the Bank of Canada to consider another interest rate cut in September.

It is a fairly quiet week on the US calendar but we do get the release of the minutes from the last Federal Reserve meeting and then on Friday Fed Chair Powell address the Jackson Hole summit and we should get more direction on his plans for an interest rate cut in September.