American dollar takes advantage of weaker EUR

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

US Dollar             1.2850-1.2950

Euro                     1.3050-1.3150

Sterling                1.5500-1.5600

WTI Oil (opening level) $89.75

The US Dollar index is marginally stronger this morning as the Greenback was led higher by a weaker Euro. Results from the ZEW business survey in Germany showed that most market experts expect a decline in the already weak German economy and that the energy crisis will continue to push inflation higher throughout the remainder of the year. The Euro should remain on its backfoot for the foreseeable future and as long as Russia threatens the natural gas supply to the region.

The Canadian Dollar has been able to remain steady against its Southern Neighbour and opens the day once again near the 1.2900 (0.7752) level, it was able to pull back some previous losses against the Euro and Pound so overall a positive night for the Loonie. 

The Loonie will be front and centre on the world stage today as we get the July Inflation report where economists are expecting that the inflation rate will have dropped from a previous high of 8.1% to a lower level of 7.6%. We could see the Loonie get a little stronger today as this number will remain well above the Bank of Canada's target rate of 2% so we will see more interest rate hikes here in Canada in September.

After pulling back their early losses from yesterday stocks are again pointing a little higher on the opening but that might not last as we get some US Housing data as well today. The report is expected to show that the housing market is really starting to fall off in the wake of higher interest rates, a bad number here could lead to a big drop in the stock market and a boost for the US Dollar.