US Dollar index fluctuates as the Fed committee discussion about removing stimulus continues

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

US Dollar         1.2050-1.2150

Euro                 1.4750-1.4850

Sterling            1.7050-1.7150

The US Dollar Index is marginally weaker this morning but that was after it was stronger yesterday after the release of the Federal Reserve meeting minutes. Investors were surprised at just how much discussion the committee had about removing stimulus and that they would be open to scaling back their stimulus program at an "appropriate time". The US Dollar jumped higher on this report and is now off its three-month lows, if in fact the Fed is moving towards removing their stimulus sooner than later then we may have seen an end to the overall weakness in the US Dollar going forward.

The Canadian Dollar is weaker this morning as it was not able to take advantage of yesterday's high inflation reading, yesterday USD.CAD reached a high of 1.2130 (0.8244) before the rate dropped back overnight. The response from the Bank of Canada at the moment is they see this inflation report as temporary and that there is still a lot of weakness in the economy, at this time they are not prepared to change their policy of supporting the economy with stimulus. BOC Governor Tiff Macklin does give a speech today so I will be surprised if he does not make a point of talking about the inflation problem.

We get some secondary US data this morning including the weekly jobless claims numbers that should show an improving employment picture in the US, in the meantime the Canadian Dollar should remain steady near the 1.2100 (08264) level.