Stocks are pointing lower as investors react to comments from the US Federal Reserve

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

US Dollar             1.2800-1.2900

Euro                     1.3450-1.3550

Sterling                1.5900-1.6000

WTI Oil (opening level) $115.25 (Oil price is up $0.75 from yesterday's opening level)

The US Dollar Index ended it recent poor form yesterday and is marginally stronger this morning as markets reacted to comments made by Fed Chair Jerome Powell yesterday afternoon. Powell basically said that the Fed stands ready to take interest rates as high as needed to curb inflation even if such interest rates start to slow growth in the economy. Stocks all traded lower overnight so investors may be convinced that much higher interest rates are on the way.

In Europe it is much the same story, yesterday saw the EU inflation rate come in at 7.4% which was revised down a little from the first prediction of 7.5%.  Markets are now fully expecting EU interest rates to grow rapidly as well this year which will put additional pressure on European stock markets.

The Canadian Dollar traded back and forth in a tight range with the US Dollar overnight but was able to make some gains against the weaker European currencies. Up today we get the Canadian Inflation report for April and the market is expecting a rise in prices of 6.7% which is in line with last month's rise. A much higher report could lead to a jump in the Loonie has it will lead the Bank of Canada to follow suit and continue to increase interest rates rapidly.

North American stocks are all pointing lower on the opening so I would expect the Greenback to remain supported throughout the day.