Canadian Dollar has reached its highest level since the beginning of 2018

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

US Dollar         1.2425-1.2525

Euro                 1.4850-1.4950

Sterling            1.7325-1.7425

The US Dollar Index is marginally higher this morning as the Greenback continues to move forward on ever increasing US interest rates. On Friday the monthly Producer Price index (a smaller measure of inflation in the US economy) jumped the most it has in one month over the past few years which led investors to push the US 10-year Treasury yield up to 1.64% and the Dollar was able to extend its recent run of strength. On Wednesday of this week, we get the latest US Federal Reserve interest rate decision and markets will be paying very close attention to how the Fed will react to higher inflation and interest rates.

The Canadian Dollar opens the week higher after it had a strong day Friday where the economy reported that some 259K new jobs were created last month well ahead of the market expectation for 72K. USD.CAD traded lower through out the day eventually hitting a low of 1.2445 (0.8035) overnight before pulling back a little higher this morning. The last time the Canadian Dollar was this strong was early 2018 so I would be a little cautious if you need to buy some USD, right now interest rates and inflation are moving higher in the US so USD.CAD could easily move further higher and push the Loonie down with it.

In addition to the Federal Reserve on Wednesday we also get some Canadian data in the form of Retail Sales and CPI, the week should remain volatile and it is best to keep an eye on the US 10-year yield, if that keeps getting stronger then the US Dollar should keep gaining and the stock market will fall back.