Currency Chronicles: US Dollar's Morning Dip, Canadian Dollar's Mixed Performance, and the Ripple Effect on Stocks and Bitcoin

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

US Dollar        1.3300-1.3400

Euro                1.4625-1.4725

Sterling           1.7000-1.7100

WTI Oil (opening level) $72.87

The US Dollar Index is a little weaker this morning as the markets get ready for this morning's release of the US December inflation report. Markets are fully expecting that Core Inflation (the rate the Fed watches closely) will have again slowed in December to a rate of 3.8% after a 4% reading in November with the overall inflation rate staying the same at 3.1%. An inflation reading less than this should enable the Dollar to trade weaker as the expectation among investors will grow that the first Fed interest rate cut will come as early as March and if the number comes in higher than expectation then markets will think the Fed will continue to hold off until later in the year (possibly May) and the Dollar will get a bit of a boost throughout the day.

The Canadian Dollar is a mixed bag this morning as it was able to pick up some gains yesterday against but it lost ground to the other currencies so market investors still do not see a case for sustained Canadian Dollar strength. USD.CAD opens the day near the 1.3350 (07491) and it should have a volatile morning.

Stocks had a rebound day yesterday and Bitcoin had a big jump hitting a two-year high as the US approved the long-awaited ETF's on Bitcoin. Stocks are flat ahead of the Inflation report and their direction today and also in the short-term will also depend on what the inflation report says.