Yen Strengthens Marginally; Canadian Inflation Report Anticipated

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

US Dollar        1.3650-1.3750

Euro                 1.4600-1.4700

Sterling            1.7300-1.7400

WTI Oil (opening level) $80.87

The US Dollar index is marginally weaker in a quiet overnight market as it was led lower by a marginally stronger Japanese Yen. Markets are again expecting the Yen to strengthen further in the short-term if the Bank of Japan intervenes in the currency market to support the Yen just as USD.JPY again near the 160.00 level.

The Canadian Dollar is front and centre today as we get the May inflation report this morning. In April, the inflation rate moderated to 2.7% down from 2.9% in March, the market today is expecting a drop to 2.6% in May, if the rate drops more than expected the markets will expect another Bank of Canada interest rate cut next month which will move to push the Loonie lower, if the rate comes in stronger than expected then we may see the Loonie jump a little.

It is a quiet day on the US Calendar, after a strong day yesterday stocks are poised for a drop on the opening but should remain volatile and the US Dollar should remain supported throughout the day.