Inflation Drops to 3.0%, Lowest Since 2021; Fed Rate Cuts Possible as USD/CAD Remains Stable

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

US Dollar        1.3650-1.3750

Euro                 1.5050-1.5150

Sterling            1.7550-1.7650

WTI Oil (opening level) $76.55

The US Dollar index is unchanged this morning and stocks remain positive as the July inflation number yesterday came in as expected at 3.0%, this is the lowest level since early in 2021 so clearly the US inflation situation is trending lower, a perquisite for the Fed to consider lowering interest rates.

The Canadian Dollar remains range bound against the US Dollar as USD.CAD is again trading near the 1.3700 (0.7299) level this morning , the Loonie is also stale against the other currencies so clearly market volatility has calmed down for the moment.

After a strong day yesterday stocks are again poised for a big jump on the opening, markets will be watching the latest release of the US Retail Sales report later this morning to confirm that the US economy remains strong and there is room for the Fed to cut rates in September. The Loonie should remain range bound for the of the rest of week and should present a continued opportunity for US Dollar buyers.