USD index loses its recent gains

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

US Dollar         1.2475-1.2575

Euro                 1.4800-1.4900

Sterling            1.7400-1.7500

The US Dollar Index is marginally weaker this morning but that was only after it traded much stronger yesterday afternoon. The stronger Dollar was brought on by several Federal Reserve speakers who were talking about the Fed scaling back their stimulus program as early as this year, interest rates will remain the same for some time but the first step for the Fed to getting higher rates to fight inflation will be to slow down the pace of bond purchases and to slow the funding of cheap money into the system. Anytime the Fed talks about changing this policy should bring a boost to the US Dollar.

The Canadian Dollar is one of the few currencies that has held in quite well against the US Dollar as USD.CAD has slowly moved back towards the 1.2500 (0.8000) level where it trades this morning. The Loonie was also able to pick up some gains against the other currencies which was a positive result for the Loonie after a couple of tough days.

We do get some trade data out of both Canada and the US this morning but I think for the most part the market will be quiet as we await the employment figures being released tomorrow.