USD index takes advantage of the weakening Euro

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

US Dollar             1.2975-1.3075

Euro                     1.2900-1.3000

Sterling                1.5300-1.5400

WTI Oil (opening level) $91.80

The US Dollar index is again stronger this morning as the Euro reached fresh lows last seen in 2002. The Dollar continues to garner benefit from the expectation that US interest rates are again set to rise by 0.75% next month and the Euro continues to fall on the current energy crisis and lower growth expectations. With Fed Chair Powell expected to reiterate the current Fed policy later in the week I doubt we will see any quick turn arounds in the coming days.

The Canadian Dollar continues to trade weaker at the hand of its Southern neighbour as USD.CAD reached a high near 1.3060 (0.7657) yesterday before pulling back a little in the overnight session. The only bright spot for the Loonie at the moment is it is faring better than the other European countries against the Greenback so it continues to garner some strength against the other currencies at the moment.

After yesterday's big drop on the stock markets the US market at the moment looks set for a flat opening but I think it will remain under pressure until we hear from Powell later in the week. Look for USD.CAD to continue to test higher levels in the coming days.