EUR jumps following the interest rate hike announced by the European Central Bank

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

US Dollar             1.3550-1.3650

Euro                     1.4450-1.4550

Sterling                1.6750-1.6850

WTI Oil (opening level) $76.80

The US Dollar index is marginally weaker this morning but that is only after a strong day yesterday where the Federal Reserve as expected announced a 0.50% interest rate hike but what caught the market off guard a little bit was Fed Chair Powell saying that there will be more interest rate hikes next year and that interest rates will stay higher for longer than expected as inflation is proving very tough to bring down.

This morning the Dollar gave back some small gains to the Euro as the ECB also announced a 0.50% interest rate hikes with EUR.USD rising to trade at 1.0660 before falling back a little. The Bank of England also increased interest rates by 0.50% but the Pound actually fell as two members of the committee voted to keep interest rates at the same level leading investors to the conclusion that the BOE may pause interest rate hikes next year. A bunch of other Central Banks also increased interest rates overnight in what was a crazy session.

The Canadian Dollar lost some ground to the US Dollar but also to the other currencies overnight as well, overall is was a big drop but it was not as bad as I thought it could be. USD.CAD went from 1.3530 (0.7391) late last night to trade at 1.3630 (0.7336) this morning so once again the Loonie cannot make any sustained progress against the US Dollar.

Stocks had a tough day yesterday after the Fed announcement and it continued into the overnight session, this morning as I write the Dow Jones is pointing down some 380 points so it could be another bloodbath on Wall Street which will only help to push the US Dollar higher and the Loonie lower.