Traders await FED's interest rate hike decision

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

US Dollar             1.2900-1.3000

Euro                     1.3500-1.3600

Sterling                1.5600-1.5700

WTI Oil (opening level) $118.30 (down $3.00 from yesterday's opening.)

The US Dollar Index is marginally weaker this morning as the market awaits word from the US Federal Reserve on interest rates later this afternoon. With the stock market crash of the last few days the market is fully expecting an increase of 0.75% to their key lending rate, an increase that was last seen in the early 1990's. Ahead of this announcement the market is now awaiting word from the European Central Bank that today called an emergency meeting to discuss the rising borrowing costs in the region, I would not expect an emergency interest rate hike to come from this meeting but they may clarify what they are going to do next month. Either way the Euro has jumped a little higher on the meeting announcement.

The Canadian Dollar has remained fairly stable ahead of the announcement from the Fed, today's movement will all depend on what the Fed does with interest rates and what they say after the announcement about future interest rates at their press conference. As the current USD.CAD exchange rate did not really move overnight I have kept the expected ranges the same as yesterday but USD.CAD could have a breakout either side with volatility on the rise after the announcement.

Ahead of the Fed we get the US Retail Sales report for May and it is expected to show a growing recovery in US sales. Stocks around the world were a little higher last night and North American stocks are also pointing higher on the opening after a few tough days. Everything of course today will depend on what the Fed says.