American dollar index starts the new year on a positive note

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

US Dollar             1.3600-1.3700

Euro                     1.4350-1.4450

Sterling                1.6300-1.6400

WTI Oil (opening level) $79.30

The US Dollar Index is stronger to start the year as yesterday the Greenback jumped even as stock markets around the world were closed for the New Years holiday. It will be more of the same for the first few months of this year as markets will be watching closely what the Federal Reserve is going to do with interest rates as inflation while moderating still remains high, I would think that the US Dollar will remain supported heading into the first few months of the new year.

USD.CAD rose about 100 points yesterday and opens the first full trading day of the year at the 1.3650 (0.7326) level which is much higher than it traded throughout Christmas week. Once again, I don't see any major or sustained Canadian Dollar strength heading into the New Year, interest rates will continue to rise in Canada and match those of the US which may give the Loonie a little support over the short term but it is unlikely to have much effect.

Stocks are pointing higher to start the year but once again the markets will remain very volatile and I would not be surprised if the Bear Market continued well into 2023. The highlight of the calendar this week will be the release of the Fed meeting minutes tomorrow and followed by the December Employment report for both Canada and the US on Friday. Look for USD.CAD to trade near the 1.3600 level ahead of the minutes release tomorrow.