Euro hits a 10-month high against the Canadian dollar

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

US Dollar             1.3450-1.3550

Euro                     1.3975-1.4075

Sterling                1.6200-1.6300

WTI Oil (opening level) $81.75

The US Dollar index is much weaker this morning as Fed Chair Powell indicated yesterday that the Fed is ready to start reducing the size of their interest rate hikes possibly as soon as this month. On this news the US Stock market soared and ended the day over 700 points higher, the US Dollar took a dive with EUR.USD 170 points higher followed by GBP.USD which jumped from a low of 1.1920 to trade as high as 1.2213 this morning. Powell also said in his speech that higher interest rates will be around for quite a while in the effort to combat inflation so there may still yet be some upside for the US Dollar.

The Canadian Dollar was able to pick up some small gains against its Southern neighbour yesterday but it certainly did not perform as will as the other currencies. While USD.CAD dropped about 130 points to trade at 1.3430 (0.7446) this morning the Loonie lost considerable ground to both the Euro and Pound. EUR.CAD hit 1.4070 this morning which is a 10-month high for the pair and GBP.CAD hit 1.6410 which is an 8-month high, clearly the markets do not think that much of the Loonie at the moment.

Stocks are again pointing higher on the opening but I doubt they will have as strong as a day as yesterday, I think that move was a bit of an overreaction. We also have some secondary US data in the form of Personal Spending and Income which will add some colour to the state of the US economy ahead of tomorrow's employment reports.