GBP moves higher on fresh inflation data

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

US Dollar             1.3350-1.3450

Euro                     1.4450-1.4550

Sterling                1.6500-1.6600

WTI Oil (opening level) $81.70

The US Dollar Index is up and down this morning. It was initially much higher early in the overnight session as the market reacted to the surprise news that the Bank of Japan would not change their policy of low interest rates and lots of stimulus to combat inflation. As the session moved along the Greenback gave back some of those early gains and it was led lower by GBP.USD which hit a one month high after that country's inflation numbers indicated that it is still too early for the Bank of England to slow the pace of interest rate hikes.

The Canadian Dollar also moved back and forth overnight and it opens the day a little stronger with USD.CAD near the 1.3380 (0.7474) level and the pair looks set to range trade for the day. With the overnight strength in Sterling the Loonie lost a lot of ground to the Pound with GBP.CAD moving from a low of 1.6340 to trade as high as 1.6570 so a significant drop for the Canadian Dollar is a short period of time.

We get some more Canadian inflation data this morning in terms of Producer Prices and they are also expected to show that inflation is moderating in Canada, we also get the US Retail Sales report for December and that number will continue to show a decline in consumer spending as the economy slowly continues to weaken off. Stocks which are pointing higher after a tough day yesterday may turn around and the Dollar index may jump if the Retail Sales number is particularly bad.