Rising US bond yields push American Dollar index much higher

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

US Dollar         1.2450-1.2550

Euro                 1.4850-1.4950

Sterling            1.7350-1.7450

The US Dollar Index is marginally lower this morning but that was only after a significant gain yesterday as the Greenback continues to benefit from bond yield's that are still moving higher on the back of the dovish stance from the US Federal Reserve earlier in the week. Yesterday saw EUR.USD drop from a high of 1.1985 to trade as low as 1.1895 and GBP.USD fell to trade as low as 1.3895 at one point yesterday so clearly a strong move for the US Dollar that should continue as long as there is pressure on interest rates to keep rising.

The Canadian Dollar suffered yesterday not only at the hands of the US Dollar but it also lost significant ground to the other currencies as well. USD.CAD rose to trade as high as 1.2520 (0.7999) before pulling back a little overnight, that is a 150 point move for the Loonie in a day which is a significant move and once again highlights just how much influence the US Dollar movements are having on our currency. The value of the Loonie was also influenced by a 7% decline in the price of a barrel of oil yesterday so the shine may be off the recent run up in oil prices which could be a small drag on the Loonie going forward.

The Canadian Retail Sales report for January was just released and it showed a decline of 1.1% which was a lot less than the market expectation of 3% and is actually quite a good number since Ontario and Quebec were just starting their latest lockdown period. USD.CAD remains close to the 1.2500 (0.8000) level after the report so it looks to be waiting for the next move with the US Dollar.