Currency market remains volatile as traders await interest rate decisions from central banks around the world

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

US Dollar             1.2600-1.2700

Euro                     1.3500-1.3600

Sterling                1.5850-1.5950

WTI Oil (opening level) $112.70 (down $3 from yesterday's opening)

The US Dollar Index is marginally weaker this morning in a quiet currency market overnight session. At the moment the daily struggle for the Dollar seems to be which country will raise interest rates faster and more aggressively than another country to combat high inflation. Last night US treasury yields rose a little so the Greenback jumped but that was followed by a small rise in EU interest rates this morning which helped to support the Euro and other European currencies. I think this is a trend we will see for a while.

The Canadian Dollar had an up and down day yesterday after the Bank of Canada announced another 0.5% increase to its lending rate and indicated that more interest rate hikes are on the way. The Bank has indicated that they are prepared to move aggressively on interest rates and it is now expected that interest rates in Canada will hit 3% by December. Reuters published a poll that shows most participants think that the combination of high interest rates and strong commodity prices will push USD.CAD down to the 1.2300 (0.8130) by December. If that is the case then US Dollar sellers may want to consider locking some of their future requirements at these higher levels.

The next Bank of Canada announcement is set for July 13th.

After an up and down day yesterday, stocks are pointing higher so we may see a rebound in the US Dollar, tomorrow we get the US Jobs report for May and it is expected to show that job growth in the US is slowing in line with a slowing economy.