The Pound lost ground after the report about lower-than-expected inflation numbers

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

US Dollar        1.3300-1.3400

Euro                1.4550-1.4650

Sterling           1.6800-1.6900

WTI Oil (opening level) $74.59

The US Dollar index is stronger this morning as it was able to pick up some gains against both the Euro and Pound. In the UK, the Pound had a big drop off as that region's inflation number came in lower than expectation which resulted in the Pound dropping off significantly as investors now expect that the Bank of England will have room to start cutting back interest rates earlier than previously expected. GBP.USD fell from an overnight high of 1.2760 to trade as low as 1.2650 so quite a big drop for the Pound on the inflation report.

The Canadian Dollar was able to hold its ground against the US Dollar strength and it also was able to pick up some gains against both the Pound and Euro, GBP.CAD fell about 100 points to trade at 1.6880 this morning and EUR.CAD fell about 50 points during the night but it did give back some of that strength this morning.

After a strong day yesterday, stocks are poised to drop on the opening this morning so the US Dollar should stay supported and USD.CAD will continue to range trade between 1.3300 and 1.3400. The calendar will remain busy before Christmas as we still have to get the reports on the US GDP tomorrow and the Canadian GDP on Friday so look for a little more volatility before the holiday.