American dollar index gets pushed lower ahead of the U.S. inflation report

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

US Dollar             1.2950-1.3050

Euro                     1.3150-1.3250

Sterling                1.5150-1.5250

WTI Oil (opening level) $87.33

The US Dollar index is again weaker this morning as more EU talk about higher interest rates and what appears to be moderating US inflation has pushed the Dollar a little lower to start the week. Tomorrow the US August inflation report is expected to show that the Inflation rate has dropped for the second month in a row and if that trend continues then the Federal Reserve may by the end of the year start to reduce the pace of their interest rate hikes. But that being said in the short-term I still think the US Dollar will remain supported and should remain strong over the next few weeks.

The Canadian Dollar was not able to extend any gains against the Greenback over the weekend and opens the week at the 1.3000 (0.7692) level and in fact lost some ground against the Euro and Pound. Even a small overnight tick back higher in the oil price could do little to support the Loonie so I still don't see any runaway Canadian Dollar strength on the horizon and US Dollar buyers need to look at any short-term strength as a buying opportunity.

Nothing of note on the calendar this morning, after a strong day on Friday Wall Street is poised for a positive opening which will be good news for investors if the stock markets can get on a bit of a roll. Look for USD.CAD to trade near the 1.3000 level ahead of tomorrow's US Inflation report.