USD index skyrockets after the US Federal Reserve meeting

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

US Dollar         1.2275-1.2375

Euro                 1.4675-1.4775

Sterling            1.7150-1.7250

The US Dollar index is much higher this morning as it has reached a two-month high as a result of the comments from the Federal Reserve meeting yesterday. The Fed indicated that they see two interest rate hikes in 2023 and that the recent rise in inflation may not be as temporary as they first thought. As you would expect on this sort of news the US Dollar went crazy and is now much higher against just about every other currency.

The Canadian Dollar was among the hardest hit against the Greenback, prior to the announcement USD.CAD was trading at 1.2170 (0.8217) and this morning we open the day at the 1.2325 (0.8113) level which is a jump of over 150 points which is a huge jump in less than 24 hours. It is not all bad news for the Loonie as it was able to make some small gains against the Euro and Pound as those currencies weakened just a little more against the Greenback than the Loonie did.

Yesterday also saw the annualized Canadian inflation report for May come in at 3.6% which is the largest increase since 2011. I would imagine that it wont be that long before the Bank of Canada takes notice and we will see higher interest rates here in Canada.

Nothing of note on the calendar today, look for USD.CAD to settle into its new reality and hang in around the 1.2300 (0.8130) for a few days.