USD index gets pushed higher by the jump in the US interest rates

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

US Dollar         1.2650-1.2750

Euro                 1.5300-1.5400

Sterling            1.7550-1.7650

The US Dollar Index is marginally higher this morning as a jump yesterday in US interest rates have spurred a short-term demand for US Dollars from investors. The US 10-year Treasury Yield jumped from a rate of 1.2% at the end of last week to trade at 1.33% this morning, the fear is that if rates jump to at least 1.5% then money will leave the stock market and starting to invest in treasuries to get the risk-free return.

The Canadian Dollar is weaker this morning as USD.CAD opens the day back higher at the 1.2700 (0.7874) level, this was after it had a strong day yesterday with the currency pair reaching the 1.2610 (0.7930) level early in the session. Once again, we see that the Loonie cannot hold onto strength and its direction is still being controlled by changes to the US Dollar.

Up today we are expecting the annualized Canadian inflation rate for January and it is expected to be at 0.9% which will be up a little from previous months but should not give the Bank of Canada any concern. If there is a bigger jump then look for the Canadian Dollar to make back some of yesterday's losses.