Even though inflation was again inching higher markets, that is not enough for a new interest rate hike

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

US Dollar         1.3500-1.3600

Euro                 1.4500-1.4600

Sterling            1.6850-1.6950

WTI Oil (opening level) $89.73

The US Dollar index is marginally weaker this morning as the markets have shrugged off yesterday's US inflation report. While the report showed that inflation was again inching higher markets don't think it was enough for the Fed to change their minds and push through another interest rate hike next week, it is more likely that they will still look at another quarter point hike in November.

Next up for Central Banks is the European Central Bank's interest rate announcement this morning and market are expecting the 10th straight increase in interest rates despite evidence of a slowing economy. The Euro may get a small boost out of this hike at the expense of the US Dollar.

The Canadian Dollar remains on the sidelines as USD.CAD dropped a little overnight to trade near the 1.3520 (0.7396) level which is its best level since the end of July. The Loonie has a long way to recover to see the levels that we saw in early summer and we would need to see a big selloff in the US Dollar for that to happen.

The markets get some additional data on the US economy today in the form of Retail Sales for August, the report is expected to show a slowdown in consumer spending but not enough to shake up the markets. Stocks are pointing higher on the opening so the US Dollar should remain supported.