USD index goes higher on interest hike expectations

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

US Dollar             1.3800-1.3900

Euro                     1.3400-1.3500

Sterling                1.5300-1.5400

WTI Oil (opening level) $83.50

The US Dollar index is again marginally stronger this morning as the Dollar continues to benefit from the expectation that interest rates in the US will continue to rise in the coming months. The Pound is back under pressure as GBP.USD fell to trade at 1.1095 as I write, it started to fall off yesterday on the news that Prime Minister Truss resigned after only 6 weeks on the job. In Europe the Euro is lower as the higher cost of energy this winter continues to weigh on the common currency. These same currency themes look like they will be here for a while yet and will benefit the US Dollar.

A similar story this morning for the Loonie as we have seen over the last few weeks when the US Dollar is strong, USD.CAD has moved higher overnight but the Loonie was able to make up some ground on the other currencies as they were much weaker against the US Dollar. The Loonie did pick up some small gains against the US Dollar after the inflation report yesterday but once again those gains were unsustainable and we continue to see the Loonie trade with a weak bias to its Southern neighbour. I would not be overly surprised if we see USD.CAD trade near the 1.4000 (0.7143) level next week as the US Dollar is just too strong at the moment.

With only US Retail Sales of note this morning the currency market should remain quiet with the US Dollar still trending higher. Stocks are pointing lower for the second day in a row so that should help to support the Greenback throughout the day and into the weekend.