CAD benefits from the oil price rebound

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

US Dollar              1.2475-1.2575

Euro                       1.4650-1.4750

Sterling                 1.7300-1.7400

The US Dollar Index is unchanged in a quiet overnight session but that is only after another strong day yesterday that propelled the index close to its high for the year. The Greenback continues to see benefit from the strong employment data that should allow the Federal Reserve to begin scaling back its stimulus plan later this year. On the flip side the virus continues to move rapidly through the unvaccinated in the United States and a lot of companies are suspending their return-to-work plans.

The Canadian Dollar is marginally weaker this morning but had a strong day yesterday as USD.CAD moved back to the low end of the recent range as the Loonie benefitted from a rebound in the oil price. USD.CAD opens the day at the 1.2525 (0.8794) level up from the lows of yesterday but still strong against most currencies.

On tap this morning the markets will be watching the US July inflation rate and it is expected to jump to an annualized rate of 4.3% which actually will be a small drop from June. It certainly looks like the pace of increases in inflation are beginning to moderate which may help the Federal Reserve hold off on interest rate hikes and push the Greenback a little lower.