USD index rebounds after a weak day yesterday

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

US Dollar             1.2725-1.2825

Euro                     1.3450-1.3550

Sterling                1.5800-1.5900

WTI Oil (opening level) $108.70 (Oil price is up $1.50 from yesterday's opening level)

The US Dollar Index is moving higher this morning after it had a weak day yesterday in response to the US Federal Reserve's 0.50% hike in interest rates. The hike was entirely expected by the market and Fed Chair Powell indicated that there will be similar hikes in June and July but what he ruled out was a much larger interest rate hike which seem to please the stock markets and helped to push the US Dollar lower yesterday.

This morning as I write the Dollar is pushing higher again as the Bank of England announced a 0.25% increase in it's key lending rate, in response to this announcement GBP.USD has fallen from a high of 1.2570 to trade at 1.2400 and GBP.CAD has fallen from a high of 1.6020 to trade at 1.5530. I think this is a case of the markets are punishing the Pound because the BOE is perceived as not doing enough to fight runaway inflation. at the moment.

The Loonie was able to pick up some gains yesterday against the US Dollar but it appears to have levelled off once again this morning and it is now giving back some of those gains as USD.CAD moves back towards the 1.2775 (0.7828) level. The next BOC meeting on interest rates is not until June 1st so the Loonie will have a tough time holding onto any bouts of strength before then.