American dollar recovers after two negative days

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

US Dollar             1.2850-1.2950

Euro                     1.3700-1.3800

Sterling                1.6050-1.6150

WTI Oil (opening level) $111.10 (Up a $1.00 from yesterday's opening)

The US Dollar Index is marginally stronger this morning as the Greenback ended its two-day decline and pulled back some losses. The Dollar was helped by US Treasury Bond yields which recovered after two days of declines, despite concerns about a slowing economy the Federal Reserve is still expected to push forward on much higher interest rates this year and we will get a look at what they are thinking as the minutes from the last Fed policy meeting are due to be released later today.

In New Zealand the parade of central banks hiking interest rates continued last night with the Reserve Bank of New Zealand hiking their key interest rate by 0.50%. On the report NZD.USD jumped to trade at 0.6520 before falling back as the US Dollar got stronger throughout the session. It was the same story for NZD.CAD which initially jumped to trade at 0.8350 before falling back later in the session.

The Canadian Dollar had a tough overnight session showing just how vulnerable it is to US Dollar strength. USD.CAD easily jumped back above the 1.2800 (0.7813) level and moved higher most of the overnight session. The Loonie also lost ground to the other currencies so overall the Canadian Dollar continues to be unable to hold onto to any strength for any significant period of time.

Up today we get the US Durable Goods report which will give the market a key indicator as to what is happening with the US economy. The market is expecting a small drop from last month which if the drop is bigger than expected may spook the stock markets into a broad based decline. After the Durable Goods report the market will focus on the Federal Reserve meeting minutes to see if there is any wavering to their commitment to increase interest rates aggressively.