There are some concerns that the rise in energy price force the inflation index to go higher

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

US Dollar         1.3350-1.3450

Euro                 1.4700-1.4800

Sterling            1.7050-1.7150

WTI Oil (opening level) $83.79

The US Dollar index is marginally weaker this morning ahead of the US inflation report where it is expected that the July inflation rate rose to 3.3%. There is some worry among economists that recent rises in energy costs may push the index higher than expected and that may force the hand of the Fed to once again increase interest rates.

The US Inflation report for July showed that inflation rose from last month's 3.0% to 3.2% (slightly better than expectation) but the Core Inflation rate dropped to 4.7%. Currently the US Dollar is dropping so early indications are that the Fed will not need to increase interest rates at their next meeting as inflation is still moderating.

Ahead of the July US inflation report the Canadian Dollar is marginally higher as USD.CAD has moved back towards the 1.3400 (0.7462) and it was unchanged against the other currencies. Post inflation report the Loonie is picking up some strength as USD.CAD has fallen below the 1.3400 level and looks to be heading lower.

Stocks are pointing lower on the opening and the oil price has jumped again so there will still be some volatility as the day moves on.