USD index goes down in another quiet trading session

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

US Dollar         1.2025-1.2125

Euro                 1.4775-1.4875

Sterling            1.7075-1.7175

The US Dollar Index is marginally lower this morning as both the FX and currency markets are extremely quiet. The FX market Volatility Index produced by Deutsche Bank in Germany showed that the FX markets have not been this quiet since February of 2020, I imagine that will all change tomorrow when we get the latest US inflation reading out of the US but for now not much will happen in the currency market.

In Europe the European Central Bank kept its key interest rate at 0% and did not give any indication of winding down their stimulus program before March of 2022 which is what they market is currently expecting. As the ECB did really add much to what was already known the Euro did not have much of a reaction.

The Canadian Dollar lost a little bit of ground overnight to the Euro and Pound but it was able to pull back some of the losses from yesterday against the US Dollar. The Loonie should be a little bit busier than most currencies today as we get the latest update from the Bank of Canada this morning, the market is not expecting any changes to their interest rate policy but they will be looking for further signs of the Bank ending the stimulus program and also looking to see what they think Canadian inflation will do in the coming months. We could see USD.CAD bounce around after the report so make sure you have your orders in place.