American Dollar buyers ignore a significant jump in inflation numbers shown on yesterday's report

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

US Dollar         1.2500-1.2600

Euro                 1.4950-1.5050

Sterling            1.7250-1.7350

The US Dollar Index is weaker this morning despite a significant jump in yesterday's inflation numbers out of the United States. The year-over-year inflation rate last month jumped to 2.6% which was slightly higher than the expected rate of 2.5% but it was not high enough to spook investors into thinking that the US Federal Reserve would abandon their current program to start fighting inflation. US interest rates which would typically see a jump on such a number actually fell back yesterday trading at the 1.62% level after reaching a previous high of 1.78%, a level last seen at the end of March. If this attitude from investors puts the so-called "reflation trade" on the back burner for a while we may see the US Dollar give up further gains in the coming weeks.

The Canadian Dollar was able to make some small gains against the US Dollar with USD.CAD dropping to open the day at the 1.2550 (0.7968) level and the Loonie was also able to hold its own against the other currencies which themselves were also much stronger against the US Dollar. Overall a good night for the Canadian Dollar and we will see if it can extend those gains today.

The global vaccination effort has run into another roadblock with the Johnson and Johnson suspending use as the CDC is looking into new evidence of blood clots. If it is determined that this is a serious problem with certain vaccines and the rollout in Canada and globally is curtailed then you will see markets react accordingly and things could get very messy. Right now, I don't think there is anything to worry about but it could be something to watch if it develops further.