Even though this month FED did not increase the interest rate, its level will stay higher longer than first thought

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

US Dollar        1.3450-1.3550

Euro                1.4350-1.4450

Sterling           1.6550-1.6650

WTI Oil (opening level) $88.84

The US Dollar index is unchanged this morning after it jumped to a 6-1/2-month high yesterday. As expected, the US Federal Reserve did not increase interest rates but came out with a very hawkish statement that said another interest rate hike later this year is possible and as inflation won't hit 2% until 2026 interest rates will stay higher longer than first thought. Investors have looked at this statement and pushed the US Dollar higher, stocks took a big tumble and currency traders will look to continue supporting the US Dollar over the medium-term.

Up next for Central Banks will be the Bank of England later today and the Bank of Japan tomorrow, currency markets will remain on edge for some time as these policy announcements play out.

As we have seen many times in the past the Canadian Dollar could not hold onto the strength it had picked up after Wednesday's inflation data, this morning USD.CAD has moved back higher to open the day near the 1.3520 (0.7396) level, on the positive side the Loonie did not lose any ground to the other currencies so it is not a complete loss. In fact, not a lot has changed in the outlook for the Loonie, it will still trade at the mercy of the US Dollar for sometime to come and a buy on any dips in the USD.CAD rate still seems to be the best strategy, with US Dollar sellers waiting for any eventual pullbacks higher.

The calendar is quiet today, markets will await the other Central Banks to finish their announcements and tomorrow we get the Canadian Retail Sales report which is expected to show a drop, a scenario which will reinforce the recession playing out here in Canada