An important day for the currency world

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

US Dollar         1.2600-1.2700

Euro                 1.5000-1.5100

Sterling            1.7500-1.7600

The US Dollar Index is marginally higher this morning in what was a quiet overnight trading session, so far this week the Greenback has been tracking the US 10-year Treasury interest rate which has been quite volatile. the 10-year rate has pulled back from its highs earlier in the week and seems stable for the moment but with the passage of the Biden administration stimulus package expected today we could see further volatility in both the US Dollar and interest rates.

The Canadian Dollar gave back some of its strength from earlier in the week and yet again we see USD.CAD could not create a sustain break below the 1.2600 (0.7937) level, the currency pair opens the day right back in the middle of the range at 1.2650 (0.7905). The Loonie also gave back some small gains against the other currencies so right now the shine is off the Canadian Dollar.

A big day on the calendar for the currency world as we get the US Inflation report for February and the market is expecting an annualized inflation rate of 1.7% which is up from the January reading of 1.4%. A higher number should send the market into a bit of a frenzy and push the 10-year yield and the US Dollar higher and hit the stock market fairly hard. In addition, we get the Bank of Canada interest rate decision and while interest rates will not be moving today the market will be interested in their comments about possible inflation in Canada.