Canadian dollar picks up significant gains against the USD

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

US Dollar             1.3500-1.3600

Euro                     1.4300-1.4400

Sterling                1.6250-1.6350

WTI Oil (opening level) $74.77

The US Dollar Index is weaker this morning as the US Dollar gave back its gains from earlier in the week yesterday and into the overnight session. Traders are now awaiting the release later this afternoon of the minutes from the last meeting to see what the Federal Reserve is thinking about the interest rate hikes vs recession debate that will surely be the main investment topic in 2023. In their last statement when they raised interest rates by 0.5% in December, they indicted that they see inflation remaining high throughout the year so traders will be looking to see if this same view continues into the new year.

The Canadian Dollar was able to pick up significant gains against the weaker Greenback overnight as USD.CAD dropped to trade at 1.3520 (0.7396) this morning, the Loonie was also able to pick up some gains against the other currencies so overall a good start to the day for our Dollar. US Dollar buyers may want to look at this move as an opportunity to pick some USD up; over the last year the Loonie has not been able to extend any real strength so buying on dips remains a good strategy.

After a flat day yesterday, stocks are pointing higher on the opening and will remain so until the minutes release this afternoon, an indication of prolonged US interest rate hikes from the Fed should push the US Dollar higher and stocks lower.