USD index is falling for the fourth day in a row

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

US Dollar             1.2450-1.2550

Euro                     1.4300-1.4400

Sterling                1.7100-1.7200

The US Dollar index is lower for the fourth consecutive day as the market digests the highest level of US inflation in over 40 years and the possibility of the first interest rate hike in early March. It looks like investors are starting to worry that an increased pace of interest rate hikes in the States will slow the growth of the stock market and investors are turning to other assets for increased return. We will see if increased interest rates are good for the US Dollar going forward.

The Canadian Dollar has been able to hold onto its strength against the weaker US Dollar but it has lost considerable ground to the other currencies over the last day or two. This tells me that investors are not looking at the Loonie as a currency that can hold its own at the moment and our dollar is still very vulnerable to further weakness.

To close out the week we get further information on the US economy in the form of the Retail Sales report for December. A strong number should help stocks and the Greenback but will also help to bring forward the expectation of the March interest rate hike.