American dollar remains volatile as investors digest the U.S. GDP report

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

US Dollar        1.3350-1.3450

Euro                1.4525-1.4625

Sterling           1.6500-1.6600

WTI Oil (opening level) $81.34

The US Dollar Index is marginally weaker this morning as markets get ready for the US fourth quarter GDP report due out shortly. It is expected that the US economy grew 2.6% on an annualized basis in the quarter which would be down from the 3.2% growth in the third quarter but still higher than the declines the economy reported in the first half of 2022.

The Canadian Dollar had an up and down day yesterday but basically is unchanged this morning (ahead of the US GDP release) as the market digested the most recent move by the Bank of Canada. As expected, the Bank increased interest rates by 0.25% but they also indicated that they would pause hikes for the moment and wait and see what happens with inflation before determining their next move. Right after the announcement USD. CAD rose to trade as near the 1.3425 (0.7449) level before falling back this morning to open the day at 1.3370 (0.7479) which is right back where we were before the interest rate hike.

As mentioned previously, US GDP report has shown the US economy grew at an annualized rate of 2.9% in the fourth quarter which is a little higher than expected and as such the US Dollar is rallying and stocks are giving back some of their earlier strength. We will see if the Greenback can extend those gains throughout the day.