UK inflation rate unexpectedly jumped to 10.4% and pushed GBP.USD higher by about 100 points

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

US Dollar         1.3650-1.3750

Euro                 1.4750-1.4850

Sterling            1.6750-1.6850

WTI Oil (opening level) $69.42

The US Dollar index is marginally weaker this morning as the market is squarely focused on the Federal Reserve interest rate announcement this afternoon. My guess is that they will increase interest rates another quarter point but will be more cautious on their view on the economy given the current banking crisis. Stocks were mixed overnight so they will trade with a cautious tone ahead of the Fed and will have another volatile day post announcement.

The big mover overnight was the British Pound that reported higher than expected inflation numbers this morning pushing GBP.USD higher by about 100 points. The Bank of England will now face a dilemma on Thursday as they also have an interest rate announcement to deal with.

Ahead of the Fed the Canadian Dollar is marginally weaker with USD.CAD opening the day at the 1.3700 (0.7299) level, the currency pair is a little lower than it's overnight highs but the course of the Loonie will be deeply impacted by the Fed announcement later today so it may be prudent for US Dollar buyers to lock some of their short-term needs in ahead of the announcement.