CAD gets hit by yesterday's inflation report

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

US Dollar             1.2550-1.2650

Euro                     1.4250-1.4350

Sterling                1.6950-1.7050

The US Dollar index is marginally lower this morning as the Greenback takes a bit of a pause from its recent run. Nothing has changed in the markets to warrant any change in the US Dollar's outlook, inflation is now a global problem and markets will be looking to the US Federal Reserve to see when they will start to tackle this problem.

In terms of the Federal Reserve, US President Biden is expected to announce who will be leading the Central Bank next year, current chair Powell is expected to be in the running but whoever Biden picks the markets will want to see some consistency in the bank's approach or they will get very nervous and start to react. We should know who the pick is by the end of this week.

The price of a barrel of oil fell below $78 this morning as China announced that they will tap their strategic oil reserve which undoubtedly will be follow suit by the US. The price now trades at $77.60 which is the lowest in weeks and will be a drag on the Canadian Dollar and other commodity currencies.

The Canadian Dollar is weaker this morning as the market reacted to yesterday's inflation report for October which showed annualized inflation reached a high of 4.7% which is an 18-year high for Canada. USD.CAD moved higher to trade at 1.2600 (0.7937) this morning and the Loonie lost considerable ground to the other currencies. Investors are now awaiting reaction from the Bank of Canada on these numbers, I would not be surprised if the BOC was forced into an earlier than planned interest rate hike next year which would be a positive for the Loonie.