Yen Surges as Fed Decision Looms and Middle East Tensions Rise

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

US Dollar        1.3800-1.3900

Euro                 1.4950-1.5050

Sterling            1.7700-1.7800

WTI Oil (opening level) $76.87

The US Dollar index is weaker this morning as the market reacts to a series of overnight events and awaits the announcement from the Federal Reserve later today. In Japan, the Yen surged higher as the Bank of Japan announced a 0.25% increase in its key interest rate and also outlined the possibility of further interest rate hikes in the future. USD.JPY fell from a high of 153.46 to trade at 150.30 and CAD.JPY fell from high of 110.90 to trade as low as 108.60 so overall a good night for the Yen.

Shortly after the Japanese news it was announced that the leader of Hamas was killed in an air strike in Tehran. The fears of an all out war in the Middle East have just grown considerably and that will greatly affect the safe haven affect on stocks and the Dollar going forward.

The Canadian Dollar has been able to maintain its value within its most recent range between 1.3800 and 1.3900 so overall it is not performing that bad this week. We will see what happens after the Fed announcement later today but keep an eye on the Middle East as a full blown conflict will hurt the Loonie.

Stocks are pointing higher this morning despite poor results last night from Microsoft, the tech heavy NASDAQ was down quite a lot yesterday as the move out of tech stocks back into the Dow Jones more traditional stocks is definitely underway. 

As mentioned earlier this week we hear from the US Federal Reserve on interest rates this afternoon, they are not expected to make any changes today but the market expects them to lean towards a rate cut in September. Any surprises from the Fed today will really shake up the market.