American Dollar receives a boost from a promising US Retail Sales report

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

US Dollar             1.2500-1.2600

Euro                     1.4175-1.4275

Sterling                1.6850-1.6950

The US Dollar index is again higher this morning as the Greenback received a boost from yesterday's better than expected US Retail Sales report. The US economy's recovery seems to be moving forward at an improved rate and most likely will lead to US interest rate hikes by the middle of next year, a scenario which will keep the US Dollar strong.

The UK economy this morning reported their inflation numbers and like elsewhere they are on the move higher with annualized inflation reaching a 10-year high in that region. The Pound jumped to a one-week high against the US Dollar and this report will put additional pressure on the Bank of England to increase interest rates next month. Look for the Pound to remain trading with a stronger bias over the short-term

The Canadian Dollar has remained range bound over the last few days but that may change as we get the Canadian inflation report this morning and like the rest of the world the report is expected to show that Canadian inflation is running well above the Bank of Canada's expected range. The market is forecasting an annualized rate of inflation of 4.7% for October, the September increase of 4.4% was an 18-year high so we will see what this number brings.