Japan holding interest rates at ultra-low level, while the US raising interest rates to combat inflation

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

US Dollar         1.3100-1.3200

Euro                 1.4350-1.4450

Sterling            1.6700-1.6800

WTI Oil (opening level) $68.56

The US Dollar index is marginally stronger this morning as it hit a seven-month high in a quiet overnight session. The Dollar moved the most against the Japanese Yen as that country is still using low interest rates to stimulate the economy while the US has increased interest rates to fight inflation. The Euro was the other mover overnight as the Euro jumped on comments from ECB President Lagarde that future rate hikes will be dependent on European economic data.

The Canadian Dollar continues to range trade at the moment in between the 1.3100 (0.7634) and 1.3200 (0.7576) levels. Up today we get the May inflation report where economists are expecting the annualized inflation rate to fall to 3.4% which would be down considerably from the April number of 4.4%. A drop like this may give the Bank of Canada enough impetuous to pause on hiking interest rates at their next meeting but we shall see what they say.

Stocks are looking to recover a little on the opening, we also get some secondary US data out today but for the most part the currency market should remain stable.