American dollar index slides as the U.S. inflation rate came out lower-than-expected

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

US Dollar             1.3500-1.3600

Euro                     1.4300-1.4400

Sterling                1.6700-1.6800

WTI Oil (opening level) $73.75

The US Dollar index is marginally weaker this morning ahead of the US inflation report, the Canadian Dollar has picked up some small gains against most currencies as the oil price rebounded a little overnight. Ahead of the US October Inflation report USD.CAD sits at the 1.3600 (0.7353) level but I would expect that there will be significant movement throughout the day. The expectation for the US inflation report is for a small drop from the October level of 7.7% to 7.3% for November.

Post Inflation Report

The November Inflation rate came in at 7.1% which is less than the expected rate of 7.3% and the Core Inflation rate also came in lower than expected at 6.0% so overall inflation remains high but is moderating, this report should allow the Fed to increase interest rates tomorrow but then hold rates into next year.

The US Dollar is considerably weaker post report, EUR.USD has risen 70 points to trade at 1.0620, GBP.USD has risen 80 points to trade at 1.2370 and USD.CAD has fallen to trade at 1.3560 (0.7326) so it is lagging a little bit behind the other currencies at the moment. The oil price has held steady and stocks are poised for a big jump on the opening, I think this volatility will continue through the morning and then markets will slow as they await word from the Federal Reserve tomorrow.