Market Awaits Fed Decision: US Dollar Weakens, Canadian Dollar Holds Steady

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

US Dollar        1.3550-1.3650

Euro                 1.5100-1.5200

Sterling            1.7900-1.8000

WTI Oil (opening level) $69.06

The US Dollar Index is marginally weaker and stocks continue to post gains as the day that everyone market investor has been waiting for has arrived. I read this morning that the market has priced in 61% chance of a .50% interest rate cut by the Fed to start off their reduction program. As I mentioned yesterday I expect a 0.25% rate cut as the US economy is quite strong and I would think the Fed would want to moderate the rise in stocks and bring back some normality to that market. 

The Canadian Dollar is unchanged this morning against just about everything, yesterday saw the July inflation rate come in at 2% which is the Bank of Canada's target rate, the Core rate came in in at 2.2% so it is safe to say that inflation is now under control for the first time since the end of COVID. The focus of the Bank of Canada will be continued interest rate cuts to stimulate the economy and try and inject some growth into the country, all of this should keep the Loonie on the back foot but if the Fed cuts by a half point today you may see our Dollar jump a bit higher in the short-term.

All market focus will be on the Fed announcement and the accompanying statement about the next cut, stocks are pointing higher again on the opening but everything will depend on what the Fed does later today.