The U.S. Dollar cratered due to the statement about the three interest rate cuts next year

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

US Dollar        1.3350-1.3450

Euro                1.4600-1.4700

Sterling           1.7000-1.7100

WTI Oil (opening level) $72.13

The US Dollar index is marginally stronger today but is set to have its largest weekly decline since July as the market reacted to the Federal Reserve comments on Wednesday indicating that the market could see as many as three interest rate cuts next year. Fed Chair Powell did hedge his bets a little saying that the Fed is still watching the data but unless the inflation data changes course, I think we will start to see a least a couple of cuts next year. As you could imagine on this report the US Dollar cratered and stocks jumped much higher and have now had two strong back-to-back days with the Dow Jones setting another record. I think this will get a little overdone in the coming days and we will see a bit of a pullback for the Dollar but for now it looks like the Greenback has some further weakness in it.

The Canadian Dollar was able to make some significant gains against the weaker US Dollar with USD.CAD trading as low as 1.3375 (0.7477) before pulling back a little higher overnight. The Loonie did not make any serious gains against the other currencies so this again leads to believe that this move may not have a lot of legs in it and US Dollar buyers should take advantage of the drop.

Lots of secondary data on tap both North and South of the border today so we will get a better picture of how the two economies are performing. Stocks are again pointing higher to start the day but I think the pace of growth will start to slow and it would not surprise me if they finished in the red today.