Investors are focused on the Bank of Canada's latest interest rate policy announcement

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

US Dollar         1.2450-1.2550

Euro                 1.4700-1.4800

Sterling            1.7250-1.7350

The US Dollar Index is marginally weaker overnight but that was after a strong day yesterday on the back of a stronger than expected inflation report. After the US reported the largest jump in inflation in 13 years stocks gave back some strength and the US Dollar jumped higher. Markets now will focus on what Fed Chair Powell says today when he testifies before Congress, both the House of Representatives and the Senate will be grilling him on his plans for removing stimulus and what is going to happen with US inflation going forward.

The Canadian Dollar had a tough day yesterday with USD.CAD reaching well above the 1.2500 (0.8000) level but like most other currencies it pulled back some strength overnight. All North American eyes will be on the Bank of Canada today as they announce their latest interest rate policy, while no changes are expected their comments on the current stimulus plans and what they expect from the Canadian economy in the near future will set the tone for the Canadian Dollar over the next few sessions.

Overnight saw the New Zealand Central Bank announce that they were ending their stimulus program and were looking at an interest rate hike by the end of the year, on the news the New Zealand Kiwi jumped over 1% against the US Dollar. If the Bank of Canada announces a similar move, then we will see a big jump in the Loonie today, it will be an interesting day either way.

In addition to the Powell speech and the Bank of Canada we also get more US data so expect both stocks and the currency market to have an active day.